The 2026 California Insurance Rate Changes: What Cerritos Homeowners and Drivers Need to Know

California insurance rates are changing in 2026—here's what's increasing, what's decreasing, and how Cerritos residents can save money on auto and home insurance.

INSURANCE TIPS

Felix | Pinoy General Insurance Services

2/6/202610 min read

black concrete road surrounded by brown rocks

If you've noticed your insurance premiums increasing over the past year, you're not alone. California insurance rates are shifting significantly in 2026, driven by inflation, increased claim costs, regulatory changes, and natural disaster exposure.

At Pinoy General Insurance, we've been fielding dozens of calls from Cerritos and Orange County clients asking the same questions: "Why did my rate go up?" and "What can I do about it?"

This guide breaks down exactly what's changing in California insurance markets, why it's happening, and the specific strategies you can use to reduce your premiums without sacrificing coverage.

What's Driving Rate Increases in 2026?

1. Construction and Repair Costs Are Up 18-25% Since 2020

The cost to rebuild a home in California has increased dramatically. Materials, labor, and supply chain issues have driven construction costs to record highs.

What this means for homeowners insurance:

Your dwelling coverage amount (the cost to rebuild your home) needs to increase to keep pace with construction costs
If your coverage hasn't been updated in 3+ years, you're likely underinsured by 20-40%
Insurance companies are increasing premiums to account for higher claim payouts

Real example: A Cerritos home insured for $450,000 in 2020 would cost approximately $530,000-$560,000 to rebuild in 2026. If the homeowner hasn't updated their dwelling coverage, they're underinsured by $80,000-$110,000.

2. Auto Repair Costs Have Increased 22% Year-Over-Year

Modern vehicles are more expensive to repair due to:

Advanced driver assistance systems (ADAS) requiring recalibration after repairs
Specialized parts for electric and hybrid vehicles
Shortage of skilled automotive technicians
Supply chain delays increasing parts costs

What this means for auto insurance:

Collision coverage costs more because repairs cost more
Total loss thresholds are lower (vehicles are totaled more quickly because repair costs exceed value)
Comprehensive claims (theft, vandalism, weather damage) result in higher payouts

Industry data: The average auto claim in California was $4,200 in 2023. In 2026, it's $5,100—a 21% increase.

3. Medical Costs and Bodily Injury Claims Are Up

Healthcare costs continue rising, and so do injury claim settlements. California juries are awarding larger verdicts, especially in auto accident cases involving serious injuries.

What this means:

Liability coverage is more expensive
The minimum required coverage ($15,000/$30,000) is dangerously inadequate
Underinsured motorist coverage is more critical than ever

Real scenario: A Cerritos driver caused a rear-end collision that injured two people. Medical bills totaled $87,000. The driver had minimum liability coverage ($15,000 per person). Their insurance paid $30,000 total. They're now personally liable for the remaining $57,000—wages are being garnished, and they've declared bankruptcy.

4. Natural Disaster Frequency and Severity Are Increasing

California has experienced:

More intense wildfire seasons
Atmospheric river storms causing widespread flooding
Hailstorms in areas that previously had minimal hail exposure
Coastal erosion and landslide risks

What this means for homeowners:

Premiums are increasing in high-risk areas (wildfire zones, flood plains, coastal regions)
Some carriers are non-renewing policies in high-risk zip codes
Deductibles are increasing (especially for wind/hail in certain areas)

Important note: Cerritos is not a high wildfire risk area, but we are affected by atmospheric rivers and urban flooding. Make sure you understand your flood coverage options.

5. Inflation and Economic Factors

General inflation affects every aspect of insurance:

Insurance company operational costs (staffing, technology, claims processing)
Legal costs (attorney fees in disputed claims)
Rental car costs (if your car is in the shop after an accident)
Temporary housing costs (if your home is uninhabitable after a claim)

All of these flow through to premium increases.

California-Specific Rate Changes by Coverage Type

Homeowners Insurance: +8-12% Average Increase

What's increasing:

Dwelling coverage (to match construction cost inflation)
Liability coverage (higher claim settlements)
Personal property coverage (replacement costs for belongings)

What you can do:

Increase your deductible from $1,000 to $2,500 (can save 12-18% on premium)
Bundle home + auto with the same carrier (10-25% multi-policy discount)
Install monitored security system (5-10% discount)
Update your credit score if it's improved (significant impact on premium)
Remove unnecessary coverages like jewelry riders for items you no longer own

Critical: Don't reduce your dwelling coverage to save money. If you're underinsured and file a claim, you won't receive enough to rebuild.

Auto Insurance: +10-15% Average Increase

What's increasing:

Collision coverage (higher repair costs)
Comprehensive coverage (higher replacement costs for totaled vehicles)
Bodily injury liability (higher medical costs and jury awards)
Uninsured/underinsured motorist coverage (because others are underinsured)

What you can do:

Increase deductibles from $500 to $1,000 (saves 15-20% on collision/comprehensive)
Drop collision/comprehensive on older vehicles (if your car is worth less than $3,000-$4,000, collision coverage may not be cost-effective)
Ask about usage-based insurance (telematics/app-based programs can save 10-30% for safe drivers)
Take defensive driving courses (5-10% discount for completing approved courses)
Review your liability limits and make sure you're not overpaying for unnecessary high limits (or underpaying for dangerously low limits)

Do NOT reduce liability coverage below $100,000/$300,000. The minimum required coverage ($15,000/$30,000) leaves you financially exposed in even minor accidents.

Commercial Insurance: +8-18% Depending on Industry

What's increasing most:

Commercial auto (delivery vehicles, service fleets): +12-18%
Workers' compensation (medical cost inflation): +6-10%
General liability (higher jury awards): +8-12%
Commercial property (construction cost inflation): +10-15%
Employment Practices Liability Insurance (EPLI): +15-25% (increased claims)

What business owners can do:

Install dash cams in commercial vehicles (5-10% discount + claim defense value)
Implement documented safety programs (workers' comp discount of 5-15%)
Bundle commercial policies (property + liability + auto = 10-20% savings)
Shop multiple carriers annually (rates vary significantly by carrier and industry)

Orange County business owners: If you haven't reviewed your commercial insurance in 18+ months, you're likely overpaying or underinsured. Schedule an audit.

The Good News: Some Rates Are Decreasing or Stabilizing

Not everything is going up. Here's where you might see savings:

1. Good Drivers Are Getting Bigger Discounts

Insurance companies are using more sophisticated data analytics to identify truly low-risk drivers. If you have:

No accidents or claims in 5+ years
No traffic violations
Good credit score
Low annual mileage

You may qualify for discounts of 20-35% that weren't available in previous years.

2. Telematics and Usage-Based Insurance Programs

Programs that monitor your driving (via smartphone app or plug-in device) can provide significant discounts:

Progressive Snapshot: Up to 30% discount
State Farm Drive Safe & Save: Up to 30% discount
Allstate Drivewise: Up to 25% discount

How it works: The app or device tracks:

Miles driven (less mileage = lower risk)
Hard braking events (safe braking = lower risk)
Speed (staying within speed limits = lower risk)
Time of day (avoiding late-night driving = lower risk)

Privacy concerns? These programs are voluntary. If you're a safe driver who doesn't drive much, they can save you hundreds annually.

3. Electric Vehicle (EV) Discounts

Some carriers now offer discounts for electric vehicles due to:

Lower theft rates (harder to steal, easier to track)
Safer crash test ratings
Lower fire risk compared to gasoline vehicles

Discount range: 5-10% on auto insurance

However, repair costs for EVs are higher, so collision coverage may be more expensive. The liability discount usually outweighs the collision increase.

4. Multi-Policy and Loyalty Discounts

Bundling multiple policies with one carrier continues to be one of the best ways to save:

Home + Auto: 15-25% discount on both policies
Home + Auto + Umbrella: 20-30% discount
Adding renters or condo insurance: Additional 5-10% discount

Loyalty discounts: Staying with the same carrier for 3+ years can provide 5-15% discounts, but don't assume loyalty saves you money. Many carriers raise rates on long-term customers because they assume you won't shop around. Always compare quotes every 2-3 years.

What Cerritos and Orange County Residents Should Do Right Now

Action #1: Review Your Coverage Amounts

Homeowners:

Check your dwelling coverage. Does it reflect current construction costs?
Review your personal property coverage. Have you acquired expensive items (jewelry, electronics, collectibles)?
Confirm your liability limit. $100,000 minimum, $300,000+ recommended.

Auto:

Review liability limits. Are you carrying $15,000/$30,000 (minimum) or $100,000/$300,000 (recommended)?
Check uninsured/underinsured motorist coverage. In California, 15%+ of drivers are uninsured.
Verify deductibles. Can you afford your current deductible if you need to file a claim tomorrow?

Action #2: Shop Your Insurance (Even If You're Happy)

Insurance rates vary dramatically by carrier—sometimes by 30-50% for identical coverage.

Real example: A Cerritos couple was paying $2,400/year for home insurance with Carrier A. We shopped their coverage and found identical protection with Carrier B for $1,650/year. Annual savings: $750.

They had been with Carrier A for 8 years and assumed loyalty meant good pricing. It didn't.

Best practice: Shop your insurance every 2-3 years, or after any major life event (marriage, new car, home renovation, etc.).

Action #3: Ask About All Available Discounts

Most people are missing 2-3 discounts they qualify for simply because they never asked.

Common missed discounts:

Paperless billing (1-3%)
Paid-in-full annual payment (5-10% vs. monthly payments)
Professional association memberships (AAA, AARP, professional organizations)
Alarm systems or security cameras (5-15%)
Good student discount for teen drivers (10-25%)
Multi-vehicle discount (10-20%)
Homeowner discount on auto insurance (5-10%)

Call your agent and ask: "What discounts am I currently receiving, and what discounts am I eligible for that I'm not using?"

Action #4: Improve Your Credit Score (If Needed)

California allows insurance companies to use credit-based insurance scores when setting rates. Improving your credit can significantly reduce premiums.

Steps to improve insurance score:

Pay all bills on time (payment history is 35% of your score)
Reduce credit card balances below 30% of limits
Don't close old credit accounts (length of credit history matters)
Dispute errors on your credit report

Impact: Improving your credit score from "fair" to "good" can reduce auto insurance premiums by 20-40% and homeowners premiums by 15-30%.

Action #5: Consider Increasing Deductibles (If You Can Afford It)

Your deductible is the amount you pay out-of-pocket before insurance coverage begins.

Standard deductibles:

Auto: $500 or $1,000
Home: $1,000 or $2,500

Premium savings from increasing deductibles:

Auto Insurance:

$500 → $1,000 deductible: Save 15-20% on collision/comprehensive
$500 → $2,000 deductible: Save 30-40% on collision/comprehensive

Homeowners Insurance:

$1,000 → $2,500 deductible: Save 12-18% on total premium
$1,000 → $5,000 deductible: Save 20-30% on total premium

The strategy: Increase your deductible to the highest amount you can afford to pay in an emergency (ideally from your emergency fund). Use the premium savings to build or replenish that emergency fund.

Example math:

Current premium with $1,000 deductible: $1,800/year
New premium with $2,500 deductible: $1,500/year
Annual savings: $300
Additional out-of-pocket risk if you file a claim: $1,500
Break-even: 5 years (if you don't file a claim, you save $1,500 over 5 years, offsetting the higher deductible)

Important: Only increase deductibles if you have the cash available to cover them. Don't put yourself in a position where you can't afford to file a claim.

Action #6: Bundle Policies for Maximum Savings

If you have home and auto insurance with different companies, you're likely overpaying.

Bundling savings:

Combine home + auto: 15-25% discount on both policies
Add umbrella policy: Additional 5-10% discount
Add motorcycle, RV, or boat: Additional savings

Example:

Current auto insurance (Company A): $1,400/year
Current home insurance (Company B): $1,600/year
Total: $3,000/year

After bundling with one carrier:

Auto insurance: $1,120/year (20% discount)
Home insurance: $1,280/year (20% discount)
New total: $2,400/year
Annual savings: $600

Action #7: Remove Coverage You Don't Need

Review your policy for optional coverages that may no longer apply:

Auto insurance:

Rental car reimbursement (if you have a second vehicle or easy access to rentals)
Roadside assistance (if you have AAA or manufacturer roadside coverage)
Collision/comprehensive on vehicles worth less than $3,000-$4,000

Homeowners insurance:

Jewelry, art, or collectibles riders for items you no longer own
Swimming pool liability coverage if you filled in your pool
Scheduled personal property coverage for items you've sold or donated

Each unnecessary coverage costs $50-$300/year. Audit your policy annually and remove what you don't need.

How to Shop Insurance: Step-by-Step Process

Step 1: Gather Your Current Policy Documents

You'll need:

Current auto insurance declarations page
Current homeowners insurance declarations page
List of vehicles (VIN, make, model, year)
List of drivers (names, birthdates, license numbers)
Home details (square footage, year built, roof age, upgrades)

Step 2: Request Quotes from Multiple Carriers

Option A: Work with an independent insurance agent (like Pinoy General Insurance) who can quote 10-15 carriers simultaneously.

Option B: Contact 3-5 carriers directly and request quotes individually (more time-consuming, but gives you control).

Carriers to consider for California residents:

Mercury
Progressive
Nationwide
Liberty Mutual
Safeco

Step 3: Compare Quotes on an Apples-to-Apples Basis

Make sure you're comparing identical coverage:

Same liability limits
Same deductibles
Same optional coverages (rental car, roadside assistance, etc.)

Don't just compare price—compare:

Financial strength rating (A- or better)
Customer service reviews
Claims handling reputation
Local agent availability

Step 4: Ask About All Discounts

Don't assume the quote includes all available discounts. Specifically ask about:

Multi-policy bundle discounts
Good driver/safe driver discounts
Homeowner discount (on auto policies)
Loyalty discounts
Professional association discounts
Safety feature discounts (anti-theft, alarm systems)
Good student discounts

Step 5: Review and Switch (If Appropriate)

If you find better coverage or lower prices:

Don't cancel your current policy until new coverage is in effect
Confirm the effective date of your new policy
Cancel your old policy in writing
Request a pro-rated refund for unused premium

Timing tip: Most policies renew annually. Shop for new coverage 30-45 days before your renewal date to avoid gaps in coverage.

Red Flags: When to Question a Rate Increase

Not all rate increases are justified. Contact your insurance company or agent if:

1. Your Premium Increased 20%+ With No Claims or Changes

Small annual increases (3-8%) are normal due to inflation and market conditions. But if your premium jumps 20-30%+ and you haven't filed claims or had tickets, something's wrong.

Possible causes:

Your carrier re-rated your risk class (possibly due to credit score changes)
Your carrier is exiting the California market and raising rates to push customers away
Clerical error (it happens)

Action: Request a written explanation for the increase. If it's not justified, shop other carriers immediately.

2. You're Being Non-Renewed in a Low-Risk Area

If you live in Cerritos (not a wildfire zone, not a high-crime area) and your carrier non-renews your policy, question why.

Possible causes:

Multiple claims in a short period (2+ claims in 3 years)
Lapse in payment history
Carrier is exiting California or certain zip codes
Property condition issues (roof age, deferred maintenance)

Action: Get a clear explanation in writing. If it's claims-related, expect higher premiums with new carriers. If it's carrier-related (they're exiting the area), you should find similar rates with another carrier.

3. You're Charged for Coverage You Didn't Request

Review your declarations page carefully. Sometimes coverage is added without your explicit approval:

Increased liability limits you didn't request
Rental car coverage you didn't add
Roadside assistance you didn't need

Action: Contact your agent immediately and request removal of unauthorized coverages. Get a refund for the period you were overcharged.

What Pinoy General Insurance Can Do for You

We've been serving Cerritos and Orange County since 1993. As an independent agency, we represent 15+ top-rated insurance carriers, which means:

✅ We compare rates from multiple companies for every client—you get the best price, not just one option

✅ We work for you, not the insurance company—our job is to find you the best coverage at the best price

✅ We handle all the paperwork—applications, policy changes, claims support

✅ We provide ongoing policy reviews—insurance needs change; we make sure your coverage keeps pace

✅ Local, personal service—we're based in Cerritos at 17304 Norwalk Blvd; stop by anytime

Free Insurance Review—No Obligation

We'll review your current policies and provide comparison quotes from our carrier partners. You'll see:

Whether you're overpaying
Coverage gaps you might have
Discounts you're missing
Options to reduce premiums without sacrificing protection

No pressure, no obligation—just honest guidance from a local agency that's been part of this community for 30+ years.

📞 Call us: (562) 402-1737
📧 Email: info@pinoygeneralinsurance.com
📍 Visit: 17304 Norwalk Blvd, Cerritos, CA 90703
🌐 Online: pinoygeneralinsurance.com

Final Thoughts

Insurance rates are going up in 2026, but that doesn't mean you're powerless. By understanding what's driving the increases, reviewing your coverage, shopping multiple carriers, and optimizing your deductibles and discounts, you can significantly reduce what you pay while maintaining (or even improving) your protection.

The worst thing you can do is ignore rate increases and assume you're stuck with them. The best thing you can do is take 30-60 minutes to review your policies and compare options.

We're here to help. Let's make sure you're getting the coverage you need at a price that's fair.

About the Author:

Felix Lopez is a licensed insurance agent and business development manager at Pinoy General Insurance Services in Cerritos, California. Since 1993, Pinoy General Insurance has been helping Southern California families and businesses navigate insurance rate changes and find optimal coverage solutions.

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