Mercury Insurance: A California Staple
Mercury Insurance is as California as it gets. With 86% of its business concentrated in the Golden State, the company has built its identity around serving this state. Founded in 1961, Mercury has grown into the sixth-largest private passenger auto insurer in California and has slowly become a major player in homeowners insurance. But here’s the twist: Mercury’s business is overwhelmingly tied to California. Risky? Maybe. But Mercury’s CEO, Gabriel Tirador, sees it as a strength. And for Californians, that’s a reassuring message.
A 12% Rate Hike: What’s Behind It?
In late March 2025, Mercury implemented a 12% rate hike for its homeowners insurance policies. Approved by the California Department of Insurance, the increase is attributed to rising construction costs—not wildfire risks, as some might assume. Speaking at the Global Sustainable Insurance Summit in Long Beach, Tirador reaffirmed the company’s commitment to the state. “We were founded in California back in 1962. We are not going anywhere,” he said.
While the rate hike may sting for some, Mercury isn’t just focused on raising prices. The company is also working on solutions to help homeowners save. A pending filing with the Department of Insurance aims to offer discounts for home hardening. Tirador explained, “The more that homeowners can do to mitigate their risk and harden their homes, the more discounts we can provide them.” It’s a practical approach, but it also puts some responsibility on homeowners.
A California-Centric Business Model
Mercury’s business is heavily skewed toward auto insurance, but its homeowners insurance segment is growing. The company underwrites more than $5.9 billion in total assets, with the vast majority tied to California. Some critics argue that being so concentrated in one state is a vulnerability. But Tirador sees it differently. “Eighty percent of our business is in California. We want to grow both homeowners and auto in California,” he said.
And grow they have. Earlier this year, Mercury became the first major insurer to start writing policies in Paradise, a town devastated by the 2018 Camp Fire. It’s a bold move that underscores the company’s commitment to the state, even in high-risk areas.
Selective Underwriting: A Double-Edged Sword
For longtime customers, Mercury’s pickiness in underwriting homeowners policies is no surprise. They’ve always been selective, focusing on risk and profitability. While this approach has drawn criticism, it’s also helped the company maintain financial stability in a challenging market.
Tirador addressed consumer concerns about rising rates, saying, “The higher costs we have have to be passed on at some point. What’s really important is the risk mitigation.” It’s a balancing act—keeping rates affordable while managing the financial realities of insuring in a high-risk state.
Financial Challenges and Resilience
Mercury has faced its share of financial hurdles. The company reported $2.15 billion in gross losses from wildfires, exceeding its $2 billion capital. “Luckily, we have a lot of reinsurance. We try to price our product to only make 4%,” Tirador said.
Critics have accused Mercury of mismanaging finances and “fleecing” consumers, but Tirador pushed back against these claims. The company’s reliance on reinsurance and its focus on modest profitability have helped it weather the storm.
Mercury’s Reach Beyond California
While the company is deeply rooted in California, holding a 6.1% market share in the state’s property and casualty market, its operations extend beyond the Golden State. California remains the core of its business, with 86% of its operations concentrated there, and its homeowners insurance in the state accounting for a significant 19% of its total U.S. homeowners policies.
However, Mercury also writes policies in other states, including Arizona, Florida, Georgia, Illinois, Nevada, New Jersey, New York, Oklahoma, Texas, and Virginia. Despite this broader footprint, California remains the heart of Mercury’s identity and operations, underscoring its commitment to serving the state where it was founded.