Consumer Watchdog has successfully negotiated a settlement with Stillwater Insurance Company and the California Department of Insurance, preventing a proposed 12.4% increase in homeowners’ insurance rates. The resolution benefits over 73,000 policyholders by saving them a total of $13 million. Originally, Stillwater sought a much larger increase of 27.5%, which was challenged by Consumer Watchdog as excessive under Proposition 103.
Settlement Details and Impact
The settlement came after Consumer Watchdog raised concerns about Stillwater’s rate hike application, arguing that the company had overstated projected losses, leading to inflated rate indications. Under Proposition 103, insurers must justify all rate changes before implementation, ensuring transparency in the process.
Following discussions and information requests, the parties reached an initial agreement on the final rates within three months. The approved increase of 12.4% represents less than half of what was initially requested. The new rates will take effect on November 27, 2025.
“This rate proceeding demonstrates how Proposition 103‘s consumer intervention provisions work effectively when insurers come to the table in good faith,” stated Ryan Mellino, a staff attorney at Consumer Watchdog. He expressed satisfaction with the amicable resolution, highlighting that the agreement protects both the company and its policyholders.
Consumer Protection and Historical Context
Proposition 103, enacted by California voters, mandates that insurers provide detailed justification for any proposed rate increases. This law promotes consumer rights by allowing representatives to review and challenge rates deemed improper. Since its implementation in 1989, the measure has reportedly saved California motorists over $154 billion.
Consumer Watchdog has been instrumental in advocating for fair rates, saving California consumers more than $6.5 billion over the past 22 years by contesting excessive rates in various sectors, including auto, home, business, and medical malpractice insurance.
For more details about Proposition 103, visit Consumer Watchdog’s website.