A few years ago I wrote about my travails in getting fire insurance in the collapsing homeowners insurance market of California. The problem was mostly wildfire related (perhaps some seismic and tsunami in certain areas, but no so much here). Since then we had the devastating Palisades and Altadena fires in L.A. that further crashed down on the heads of insurers and caused the state’s assigned fire risk pool plan, called The FAIR Plan to go under extreme duress. So, the market is still strained, but it’s in what some are calling an early thaw. Big carriers are starting to return after years of pulling back. On September 18, Commissioner Lara reported that State Farm, the state’s largest homeowners writer, and Allstate have both filed plans to begin writing new residential policies. Allstate has been closed to new homeowners business since November 2022, and its return is tied to approval of an overall 1.4% rate increase. Lara’s Sustainable Insurance Strategy (SIS) lets insurers price in catastrophe models and reinsurance costs. In exchange, carriers commit to writing at least 85% of their statewide market share in wildfire-distressed areas. Nine insurers have committed to expand under it, including six of the state’s 10 largest home insurance groups. One in seven policies written last year went through the FAIR Plan or the surplus lines market. The median rate approval in California takes 225 days, compared with 35 days nationally. There’s also a 29.1% FAIR Plan rate increase due this month.
But when I spoke to my insurance agency about my upcoming renewal in mid-November, I was told that my FAIR Plan policy premium was increasing from $7,500 to $19,900, a 165% increase. The expression that immediately sprang to mind was WHAT THE FUCK! A jump that size is far above the average, but I’m told by Claude that it’s within the range the new rates allow for high-fire-risk areas like Hidden Meadows. Interestingly enough, the national wildfire rating service gave this location a 2 out of 5 in terms of wildfire risk, so I’m not sure what that means. While the CDI approved a 29.1% average increase for new and renewing policies effective October 15, 2026, cut from a 35.8% request, that’s only an average: the largest part of the increase is in the wildfire portion of premiums, so higher-risk properties see bigger hikes. Individual changes range from an 80% decrease to a 200% increase supposedly. Some policyholders will see their wildfire premiums double…or apparently MORE in my case. They claim that the reasons behind it are the January 2025 LA wildfire losses, a reinsurance market that has repriced California risk, and a plan that more than tripled in size over five years. There are obviously other things that can push the number higher like coverage amount (automatically raised for rebuilding-cost inflation), territory or risk re-scoring (if your property has been placed in a higher wildfire tier), and whether you have sufficiently de-risked by turning your home into a barracks with gravel surrounding it (a bit of an exaggeration…but not by much).
They say that there are early signs of progress in the market and that new FAIR Plan business is down 25% in 2026, which regulators read as an early sign that the reforms are working…but you wouldn’t know that from my quote.
So, I called my neighbor and asked what he has seen in his coverage, since I know most of the homes on the street are on the FAIR Plan by necessity. He sent me his recent renewal bill, renewed a month ago. His home is on a larger piece of property, is larger in square footage and while not as nice a house, is valued on Zillow at approximately the same amount as our house. He complained that his premium had gone up 20% this year and he is now paying $4,700. Another expression came to my mind…WHAT THE HOLY FUCK! How is that possible? I have now called my other neighbor on the other side of me and hope to get similar information from him. I have emailed my insurance broker and asked that they petition my case. I will also call the FAIR Plan people directly to find out what’s up.
I know I do not spend as much time pinching pennies as many others do and I probably don’t do it enough for my own good. I pay too much for water since I irrigate so much. I pay too much for electric since I run the A/C too much and too cold. But for the life of me, I do not know what extravagance I am performing that would cause my homeowner’s insurance rates to be 4X my neighbor’s rates. In this world of big data, maybe the world has decided I’m a chump and anyone can take advantage of me. That’s not altogether impossible to imagine. I am going through a solar upgrade evaluation right now and when the guy told me that he cannot send me a formal proposal unless I give him my social security number, I immediately balked. That’s the kind of thing old, feeble-minded people agree to and then we see them on Dateline and how their life savings had been washed away by some crook.
I am going to cut short this story at this point because I plan to dig in on this issue because where I might not stoop to pick up a penny on the street, the Not-So-Fair Plan rate increase of over $12,000 has certainly caught my attention and I plan to pull out all the stops to get this fixed. I will report back on what I am able to extract from the system of fairness in the universe.