Ashley Zavala, a California Capitol correspondent for KCRA 3, said that Insurance Commissioner Ricardo Lara has received assurances from several major insurance companies about their return to the state under his new reform efforts. Zavala made this statement on X on March 20.
"Seven of the 12 biggest insurance companies have either completely stopped or limited policies in California," said Zavala.
Fox 26 reports that several major insurance companies have exited or scaled back operations in California due to rising replacement costs and the state's restrictive insurance regulations, which limit their ability to raise premiums. Companies such as State Farm, Allstate, Nationwide, Farmers, and Chubb have either stopped writing new policies, withdrawn subsidiaries, or announced non-renewals of existing homeowners coverage. Other companies, including The Hartford, American National, AmGUARD, and Tokio Marine, have fully ceased offering homeowners insurance in the state due to business risks and reinsurance challenges.
According to Conroy Simberg, lawsuit abuse is contributing to rising insurance claims costs. Excessive jury verdicts, often exceeding $10 million and known as "nuclear verdicts," are becoming more frequent in states like Florida. These inflated awards are driven largely by non-economic damages and third-party litigation funding (TPLF), straining insurers and increasing premiums.
TPLF is a financial arrangement where an outside party—typically a hedge fund, investment firm, or private investor—provides money to a plaintiff or their attorney to cover legal expenses in exchange for a portion of any future settlement or court award. If the case is lost, the plaintiff generally owes nothing. TransRe describes TPLF as a high-risk, high-reward investment strategy for funders.
According to her LinkedIn profile, Zavala is a broadcast journalist currently serving as the California Capitol correspondent for KCRA 3 and My58 Television in Sacramento. A University of Missouri graduate, she has reported for major outlets across California and the Midwest with a focus on state politics and investigative news.