Farmers Insurance won California regulator approval on May 11, 2026 to raise its home-auto bundle discount from 15% to 22% starting September 15. A separate California auto rating plan with new discounts and improved coverage takes effect July 1, 2026. Customers who bundle both policies will generally see net rate decreases, even though the homeowners rating plan raises statewide rates by an average of 1.5%.
Farmers Insurance will raise its California home and auto bundle discount from 15% to 22% on September 15, 2026, after the California Department of Insurance approved a new homeowners rating plan. Bundling customers will generally see net rate decreases despite a 1.5% statewide average increase on homeowners premiums.
The approval reshapes the bundle math for California Farmers customers who already carry both policies, plus any California driver weighing a bundle quote at renewal. Farmers ranks as California's second-largest auto insurer with about 15% market share.
- Bundle discount jumps 7 percentage points, from 15% to 22%, on September 15, 2026
- Farmers asked the state for a 6.99% homeowners rate hike and received 1.5%
- A separate California auto rating plan with new discounts and coverage takes effect July 1, 2026
- Wildfire mitigation discounts are now built into the homeowners rating plan
- Customers who bundle both policies will generally pay less under the new structure
What California Approved on May 11
Insurance Commissioner Ricardo Lara's office signed off on Farmers' new homeowners rating plan after the carrier filed its application on November 21, 2025. Farmers asked for a 6.99% average statewide rate increase. State regulators approved 1.5%, less than a quarter of the original request.
The September 15 rating plan applies to Smart Plan Home and Next Generation Home policies for both new and existing customers. Behram Dinshaw, president of personal lines for Farmers Insurance, said the plan supports growth in distressed California ZIP codes.
"We continue to see encouraging signs that the California insurance marketplace is strengthening and we want to be well-positioned to grow and provide improved coverage offerings to California consumers. Together, our new homeowners and auto rating plans provide consumers with multiple opportunities to save, especially through increased discounts for bundling policies." Behram Dinshaw, President of Personal Lines, Farmers Insurance.
Effective July 1, 2026, Farmers will also roll out a new California auto insurance rating plan that the company says will include additional discounts and improved coverage options. Farmers has not yet detailed the auto plan's specific changes, but California auto policyholders should watch for rate change notifications from their agents starting late spring.
What This Means for California Drivers
Insuring a car in California costs $2,133 per year on average, or roughly $178 per month, according to Experian's March 2026 data. The state's typical homeowners policy runs about $1,860 annually for $300,000 in dwelling coverage. A Farmers customer who carries both policies and qualifies for the new 22% bundle discount could save about $130 more per year than under the previous 15% discount, based on standard bundling discount math applied to the home premium.
Existing Farmers homeowners customers who carry their auto policy with another carrier should run the bundle quote at their next renewal. Switching the auto policy to Farmers triggers the full 22% discount on the home premium, which translates to roughly $409 in annual savings on a $1,860 home policy. The prior 15% discount delivered about $279.
Drivers who already carry Farmers auto but use a different homeowners carrier face a different calculation. The bundle discount only applies once both policies sit with Farmers. Customers in this position should compare a Farmers home quote against their current carrier's renewal, factoring in the 22% bundle savings on the home premium.
How Farmers Compares to Other California Carriers
Farmers' bundle discount expansion lands in a market where the largest competitors offer wildly different bundling math. State Farm carries the deepest bundle discount in California at 26%, but the carrier paused new homeowners policy writing in May 2023 and has not resumed. Allstate's 20% bundle discount applies only to existing California policies because the carrier stopped accepting new homeowners applications in 2022.
| Carrier | California Bundle Discount | New Homeowners Policy Status |
|---|---|---|
| State Farm | 26% | Paused since May 2023 |
| Farmers (Sept 15) | 22% | Cap removed Nov 2025, actively writing |
| Allstate | 20% | New applications paused since 2022 |
| Farmers (current) | 15% | Active, no caps |
| Progressive | 9% | Active |
Sources: Carrier disclosures and industry analyst data reported by Quote.com and MoneyGeek, May 2026. Bundle discount percentages represent the maximum stated discount before underwriting adjustments and apply to qualifying customers carrying both home and auto policies with the same carrier.
The bundle discount comparison only tells part of the story. State Farm's 26% discount is unavailable to most new California customers because the carrier is not writing new homeowners business, which means even existing State Farm auto customers cannot bundle a new State Farm home policy. Allstate's 20% discount has the same constraint for new business. Farmers is the only major California carrier offering both a top-tier bundle discount and active new homeowners business writing without volume caps.
What You Should Do Before September 15
Check Your Renewal Date
Any Farmers homeowners policy renewing on or after September 15, 2026 will be repriced under the new rating plan. Pull up your most recent declaration page or call your Farmers agent to confirm the renewal month and what the new 22% bundle discount will mean for your specific premium.
Ask About Wildfire Mitigation Discounts
Defensible space compliance, Class A fire-resistant roofing, ember-resistant venting, and IBHS FORTIFIED designations qualify for discounts under the new rating plan. Document any mitigation work completed and submit the records to your agent before renewal.
Run Three Bundle Quotes
Get a Farmers bundle quote with the new 22% discount, a Progressive bundle quote at 9%, and at least one independent agent quote covering Mercury, CSAA, or other actively writing carriers. The 22% Farmers discount only beats the competition if the underlying home and auto rates are also competitive.
Confirm the July 1 Auto Rate Changes
Farmers' new California auto rating plan takes effect first, on July 1, 2026. Ask your Farmers agent for a written estimate of how the new auto plan affects your specific policy before deciding whether to bundle.
The Bigger California Insurance Picture
California auto insurance carriers serving roughly 85% of state policies raised rates by more than one-third since 2023. For 2026, the average California rate increase will land near 6.13%, down from 16% in 2025 but still well above the national average of 0.67%. California's $2,133 average annual full-coverage premium ranks among the highest in the country.
Farmers' approval is part of a broader recovery driven by Lara's Sustainable Insurance Strategy framework. The strategy allows insurers to use forward-looking wildfire risk models in rate filings and pass a portion of reinsurance costs through to policyholders. In exchange, insurers commit to writing a minimum percentage of their new policies in CDI-designated distressed areas.
Mercury Insurance, CSAA, Travelers, and Allstate have made similar commitments or filings under the new framework over the past several months. Slide Insurance entered the California market on May 4, 2026 as an excess and surplus lines carrier. Farmers expects to add several thousand new policies over the next two years in distressed California areas, where it has already seen nearly 10% year-over-year growth in new business writings.
The September 15 rating plan only covers homeowners insurance. The July 1 auto rating plan is a separate filing with its own pricing structure. Customers who carry only an auto policy with Farmers will not see any direct change from the September 15 homeowners filing. Bundle eligibility requires carrying both a Farmers home and a Farmers auto policy.
What to Watch Next
Farmers has not yet released the full text of the July 1 auto rating plan or specified the new discounts and coverage options it adds. California auto policyholders should expect rate change notifications from their agents in the weeks leading up to July 1, with renewal billing reflecting the new rating plan starting that date. The CDI also has not detailed the complete qualifying list of wildfire mitigation measures under the September 15 homeowners plan, though Farmers has said the framework aligns with other Sustainable Insurance Strategy filings.
More California carriers are likely to file expanded bundle discounts and wildfire mitigation credits through the second half of 2026. State Farm and Allstate have not signaled when they might resume writing new California homeowners business, but ongoing rate negotiations between the carriers and the CDI suggest possible 2027 timelines.
Frequently Asked Questions
The 22% home-auto bundle discount takes effect September 15, 2026 for new and existing customers with Smart Plan Home or Next Generation Home policies. Your specific renewal date determines when you start receiving the new discount. Policies renewing before September 15 will continue at the 15% discount until their next renewal.
Existing Farmers customers who already bundle home and auto will automatically receive the increased discount at their first renewal on or after September 15, 2026. New customers, or existing customers adding a second policy, should ask their Farmers agent to confirm bundle eligibility at the time of quote. Wildfire mitigation discounts may require submitting documentation of qualifying improvements.
Farmers is rolling out a new California auto insurance rating plan effective July 1, 2026, separate from the September 15 homeowners filing. Specific rate impacts will vary by policy, coverage, and ZIP code. Call your Farmers agent for a written estimate of how the new auto rating plan affects your specific policy before renewal.
State Farm offers a 26% bundle discount in California, but the carrier paused new homeowners policy writing in May 2023 and has not resumed. Allstate offers 20% but stopped new homeowners applications in 2022. Progressive offers 9% and is actively writing. Farmers' 22% discount is the deepest available on actively writing new California homeowners business as of May 2026.
Farmers has not published the full list of qualifying measures, but the framework aligns with other Sustainable Insurance Strategy filings. Typical qualifying improvements include IBHS FORTIFIED designation, Class A fire-resistant roofing, ember-resistant venting, defensible space compliance, and similar wildfire-resistant property hardening. Contact your Farmers agent for specific eligibility before renewal.
- Farmers Insurance Press Release on PR Newswire - California Rating Plan Approval (May 11, 2026)
- Farmers Insurance - Original California Rating Plan Filing (November 21, 2025)
- Coverager - Farmers Receives California Rating Plan Approval
- Experian - Average Cost of Car Insurance in California for 2026
- California Department of Insurance - Rate Review Reforms
- Insurance Business Magazine - Farmers California Rate Filing Analysis
- Quote.com - California Carrier Bundle Discount Comparison