Consumer Watchdog Sets Record Straight With Newsom On Insurance, Companies He Said Were "Coming Back In" Never Left the Market

SACRAMENTO, Calif., Sept. 26, 2025 -- Consumer Watchdog issued a "Consumer Alert" video warning the public about several misstatements Governor Newsom made at Climate Week in New York about the California insurance market.

The video called Newsom out for stating four insurance companies that had left California were coming back. In fact, none of the companies, nor a fifth Insurance Commissioner Lara added to the list – Mercury Insurance, USAA, CSAA, Pacific Specialty, or California Casualty -- had ever left the state. Neither had they announced blanket nonrenewals like other companies have in California. Not only had the companies not stopped doing business in the state, one, Mercury Insurance, actually expanded its footprint by taking over business of another company that left, Tokio Marine, in May 2024. One company, USAA, had cut back on new policies for homeowners in wildfire risk areas, and another, Pacific Specialty, had paused new business.

Newsom also misstated the terms of the regulations under the so-called "Sustainable Insurance Reforms." He claimed that in exchange for higher rates insurance companies would have to insure 85% of people who live in the wildland-urban interface or WUI. In fact, there is no such requirement in the regulation – only a target that companies have to insure 5% more people after two years, and the goal is not enforceable.

Consumer Watchdog pointed out the FAIR plan, the insurer of last resort, has more than doubled in size since Lara announced his "Sustainable Insurance Strategy" more than two years ago – from 284,000 customers to 649,000 in June.

Consumer Watchdog also criticized the Governor for claiming Californians' insurance rates were too low.

"Have you ever heard a governor claim people need to pay more for their insurance?" said Jamie Court, president of Consumer Watchdog in the video. "The fact is insurance companies have and do make good profits in California. They are insurance companies though. If allowed to they will cherry pick risks to make as much money as possible…

"Governor Newsom needs to get his facts and his priorities straight. He should be more concerned about speeding up claims payment for wildfire survivors who are getting the run around from their insurance companies than he is about getting companies their rate hikes quicker.

"If the Governor wants to help insurance policyholders he should forget the carrot of rate hikes and pick up the stick. Insurance companies need to be told that if they want to sell insurance in the state they have to sell insurance to the people who do the right thing and fire-proof their homes to the specifications of state wildfire mitigation standards. A ballot measure filed days ago would do just that."

Read more about the Insurance Policyholder Bill of Rights.

SOURCE Consumer Watchdog