California’s FAIR Plan, the state’s insurer of last resort for homeowners who cannot get coverage from private companies, will raise rates by an average of just under 30% beginning with renewals after Oct. 15. The plan covers nearly 663,000 residential policyholders, according to the San Francisco Chronicle. [1]
The increase is the largest statewide FAIR Plan hike in years. The California Department of Insurance approved the increase after the plan had requested a larger hike, and the average rate change will vary widely by policyholder. About half of customers will see increases of 30% to 50%, while some homeowners will see reductions and others will face much steeper increases, including rate jumps of up to 200%. [1][4]
Homeowners in high wildfire-risk areas are expected to be hit hardest. In some communities, such as Malibu and Lake Arrowhead, about half of homes are already insured through the FAIR Plan, reflecting how many private insurers have pulled back from the state’s riskiest markets. [1]
The pressure on California homeowners has been building for years. Stanford researchers found that home insurance premiums in the state have risen 84% since 2020, driven by major wildfires and inflation as well as the growing number of homeowners forced into the FAIR Plan after private insurers restricted new policies or stopped renewing coverage in high-risk areas. [3]
