Mayerly Vanegas Larreta is exasperated because she is not getting any detailed answers as to why her home insurance premium went up 57% between 2023 and 2024.
She and her brother own a condo their parents live in in Alhambra, ten miles from downtown LA. It’s 1,400-square feet, on a hill with a small city water reserve behind it. The place is surrounded by other houses, no mountains or bushes nearby. It’s considered at moderate risk for wildfire in the next 30 years. It’s also not in a flood zone. She’s owned the condo since 2003 and has never filed a claim. She’s had Mercury insurance for about 25 years with small upticks in the premium. So, she was shocked when the annual home premium went up more than 50% from $663 to $1,042.
She emailed her broker to ask why, and if there was any regulation that caps the percentages that companies can raise rates annually. The broker emailed, “I’m not sure if there are ‘caps’,” but said insurance companies aren’t making enough money, and that they are also looking at the age of the home and where it is located.
Her agent told Mayerly that Mercury was one of the few companies left willing to cover homes in California.
“I can understand that they are trying to recuperate some of the money they lost but it is not correct for them to gouge and take advantage of people,” Mayerly said.
Mayerly called the Department of Insurance and also asked for a rate review. “I was able to get one person on the phone from the department of insurance and this person told me to go to a specific webpage and I will be able to see the approvals for each insurance company for the year,” she said. “I went into the website like she told me, but it is very cumbersome to figure it out. I could not make sense of it. Companies go by different names; for example, Mercury seems to also do business as California Automobile Insurance Company so it is hard to figure out which rate applies to our condo.” Mayerly gave up on that.
She filed a complaint with the department. All she got was a letter from the Department stating, “The premium you are being charged is correct.” The letter reviewed the difficulty of finding residential insurance “in areas of the state that insurers identify as having a higher-than -average risk of wildfire,” and assured her that Commissioner Ricardo Lara was doing all he could to “come up with viable long-term solutions to the availability and affordability problem.” The letter stated nothing specific about Mayerly’s condo or its wildfire risk, just that a rate increase was approved.
She also received a letter from Mercury. All it said was that “the reason for the renewal increase is due to an approved rate filing that was effective 5/12/2023 and a class plan filing that was effective 12/15/2023.”
“There was no response from either side on this is how it works or the exact percentage they were approved for,” said Mayerly. Never did Mercury or the broker explain specifically what about her property caused the rate to go up, or whether fire risk in other parts of the state had an impact.
She started looking for other alternatives but the next broker referred her back to Mercury. Mayerly has her hands full taking care of her parents and has no energy to keep looking. “I was so fed up and seeing that the Department is not doing anything, am I really going to fight this fight? You are so discouraged it doesn’t feel like anything is going to change. There has to be a movement for change.”