Qualitas Insurance Company is introducing a rate and rule update for its California Borderless private passenger auto program, seeking a 25.3% overall increase across a book of 1,120 policyholders and roughly $1.33 million in written premium.

The filing, submitted on a prior approval basis, reflects an indicated change of 38% and an estimated premium lift of about $316,000, with a targeted effective date of July 1, 2026. It replaces both the rate manual and underwriting guidelines while maintaining the existing framework, positioning the update as a no-variance structural revision.

The program continues to rely on a highly factor-driven rating model, with premiums determined through a multiplicative structure incorporating driver history, mileage, years licensed, vehicle characteristics, and discounts such as multicar, persistency, and good driver. The underlying tables show sharp segmentation, particularly across driving behavior and usage patterns.

From a performance standpoint, the filing highlights material pressure in physical damage. While the overall loss picture shows volatility, collision stands out with a projected loss and DCCE ratio of 167.6%, alongside 97.1% for comprehensive, pointing to sustained unprofitability in those coverages.

Despite the magnitude of the indicated need, the selected increase falls below indication, reflecting regulatory constraints. Physical damage, in particular, remains underpriced relative to indicated levels, suggesting the update may not fully restore adequacy.

The portfolio itself is small and contracting, with written premium down from prior years and low credibility across most coverages, increasing reliance on supplemental data. At the same time, underwriting constraints limit growth, as new business is restricted to good drivers under California rules.

The Borderless structure introduces a distinct risk profile, covering drivers with vehicles garaged in Mexico but operating in California, which likely contributes to elevated physical damage exposure.

Overall, the filing reflects a book under pressure, with targeted rate action aimed at stabilizing performance rather than resetting the portfolio.