Insurance Commissioner Ricardo Lara recently held an online discussion on the current state of the insurance market in California. He was joined by Carolyn Kousky of Insurance for Good and Amy Bach of United Policyholders
Here are some takeaways from that discussion:
California’s homeowners’ insurance market is showing early signs of stabilization, but homeowners, particularly those in wildfire-prone communities, continue to face significant challenges with affordability and availability.
FAIR Plan growth may be beginning to slow. This is an important indicator because rapidly increasing FAIR Plan enrollment has reflected homeowners being unable to obtain traditional coverage. The California Department of Insurance (CDI) reports roughly 668,609 FAIR Plan homeowner and commercial policies, while approximately 662 California ZIP codes are considered distressed insurance areas.
More private insurers are beginning to expand. Under California’s Sustainable Insurance Strategy, CDI reports that six homeowners’ insurance groups are expanding in California, compared with zero in 2025. Insurers participating in the strategy are expected to increase coverage in wildfire-distressed communities, with the long-term objective of moving homeowners away from the FAIR Plan and back into the traditional insurance market.
The mountain and wildfire communities remain a major concern. Although the statewide outlook is improving, high-fire-risk areas are likely to experience a slower recovery. Availability, premiums, wildfire modeling, mitigation and insurers’ willingness to write new policies remain critical issues. The FAIR Plan itself is also under pressure, with a recently reported 29.1% rate increase adding to affordability concerns.
The overall message: California appears to be moving in a better direction, but this is not an immediate fix. The Sustainable Insurance Strategy is intended to make rates more accurately reflect risk while requiring participating insurers to write more policies in distressed areas. The real measure of success will be whether homeowners actually see more choices in the regular market and less dependence on the FAIR Plan.
For Lake Arrowhead, Crestline, Running Springs and our surrounding mountain communities, the encouraging news is that the state reforms specifically target wildfire-distressed areas. The concern is that meaningful improvement will take time, and homeowners should continue to shop coverage, maintain defensible space and document property-hardening improvements rather than assuming the insurance crisis is over.
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