05/23/2026
California FAIR Plan raising rates 29%, on average, starting Oct. 15
The California FAIR Plan - the state's high-cost, bare-bones fire insurance of last resort - is raising rates 29%, on average, starting mid-October.
SACRAMENTO, Calif. — The California FAIR Plan - the state's high-cost, bare-bones fire insurance of last resort - is raising rates 29%, on average, starting mid-October.
The California Department of Insurance (CDI) approved that increase just last month. That will be a sharp and expensive premium hike for some homeowners, but the Department says there's good news to help balance this all out.
Starting October 15 - whenever after that someone’s policy is set to renew – customers will see an average 29% increase in their homeowners premium. That means some people will see an increase higher than that and others, lower.
"Nobody wants to be on the FAIR Plan — it's limited coverage, and it comes at a higher cost. And that's the reality,” said Michael Soller, Deputy Commissioner for Communications at the California Department of Insurance.
People whose policies renew in mid- to late-October, he said, could get their renewal notice as soon as mid-July — 90 days out.
California regulations – spelled out in Prop 103, passed by voters in 1988 - require insurance companies to get CDI’s permission before raising rates.
Last year, the FAIR Plan asked for a 35.8% increase. Last month, the department granted a lower 29%.
"That's still a huge amount for people,” Soller said. “That's a big, unexpected expense for people."
But, he said, the state’s largest insurance reforms in 35 years - the Sustainable Insurance Strategy, put into place by Commissioner Ricardo Lara – are beginning to pay off.
Insurance companies that in recent years paused or limited business in the state due to high wildfire risk and burdensome regulations are now coming back. The reforms offer them rate-setting tools they’ve been seeking for years, in exchange for an agreement to write more policies in higher-wildfire-risk areas.
"Where you might have gotten a ‘no’ from your insurance agent, it's worth calling them back saying, ‘Hey, I know that there's some changes coming. I know that policies are being written,’" he said.
12 insurance companies are responsible for 85% of homeowners policies in the state, Soller said.
Of those, six so far have agreed to the Sustainable Insurance Strategy. CSAA’s new rate – which means a commitment to writing more policies – went into effect March 1, at an average increase of 6.9%. USAA’s, 6.9%, went into effect April 30. Mercury’s average increase of 6.9% will go into effect July 1. Farmers – at 1.5% - on Sept. 15. Travelers and AAA SoCal are in the rate review process, along with several other, smaller companies.
"Now is the time to start calling other agents,” Soller said.That message is especially aimed at the 663,000 homeowners currently on the FAIR Plan—a number four times higher than it was in 2019.
Earlier this month, the state Senate Insurance Committee held a hearing on what it will take to bend the wildfire risk curve and stabilize the market long-term.
Insurance Commissioner Ricardo Lara pointed to FAIR Plan data as the clearest signal yet that the strategy is working.
“The FAIR Plan growth has slowed measurably over the last two quarters. The slowdown coincides directly with the insurers filing and receiving approvals under the Sustainable Insurance Strategy,” Lara said. “This is not accidental. This is not coincidence. This is the Sustainable Insurance Strategy working as intended."
Still, experts say the market is far from fixed. Actuaries and fire scientists who testified at that same Senate hearing warned that real affordability will only come when wildfire risk itself comes down, through large-scale home hardening and community mitigation.
"Every dollar invested in mitigation prevents $6 in disaster costs and spares families the anguish of losing their homes and businesses,” he told the Senate Insurance Committee.
People can head to CDI’s website to search for agents and companies now writing in their area. People may find their options – once extremely limited - have changed. If not now, then keeping checking back, the department says.
