The California home insurance market in 2026
Why coverage got hard, what the numbers show, and how homeowners are adapting.
What happened to the market
After a series of record wildfire seasons and large insured losses, several major carriers paused new business or non-renewed policies in higher fire-hazard areas of California. Homeowners with no claims at all have been dropped simply because of where they live. The result is a squeeze: fewer admitted carriers writing in fire-prone regions, and more homeowners pushed toward the FAIR Plan.
The 2025 Los Angeles fires reset the market
The January 2025 firestorm was the turning point. The Eaton and Palisades fires became two of the costliest wildfires in US history, destroying more than 16,000 structures across Los Angeles County and driving insured losses that reshaped every carrier's California math.
| Wildfire (year) | Insured losses at the time | Structures destroyed |
|---|---|---|
| Palisades, Los Angeles (2025) | $23 billion | 6,833 |
| Eaton, Los Angeles (2025) | $17.5 billion | 9,413 |
| Camp, Butte County (2018) | $10 billion | 18,804 |
| Tubbs, North Bay (2017) | $8.7 billion | Not itemized |
Loss figures are per the Insurance Information Institute (Aon and CAL FIRE data). Because so many affected homes were already on the FAIR Plan, the plan itself faced billions in claims, adding pressure that ripples out to rates statewide.
The numbers behind the crisis
- FAIR Plan policies grew to more than 668,600 by the end of 2025, an increase of about 44 percent from the prior year
- That is up from roughly 270,000 policies in 2022 - more than a 150 percent increase in a few years
- FAIR Plan total exposure reached roughly 724 billion dollars as of December 2025
- In the highest wildfire-risk ZIP codes, an estimated 41 percent of homes are covered by the FAIR Plan, versus about 4 percent in lower-risk areas
- Growth showed early signs of slowing in late 2025, rising less than 4 percent in the final quarter
Figures are drawn from the California FAIR Plan key statistics and reporting on the California Department of Insurance market. They change over time; treat them as directional.
What the state is doing
California regulators have been working on a Sustainable Insurance Strategy intended to bring carriers back, including allowing catastrophe modeling and reinsurance costs in rate-setting in exchange for carriers writing more policies in wildfire-distressed areas. The Safer from Wildfires regulation also requires insurers to recognize home-hardening and defensible-space mitigation. These changes are still working through the market.
What it means for you
If you have been non-renewed or can only find the FAIR Plan, you are far from alone - and you still have options. An independent broker can check admitted carriers still writing your area, surplus lines wildfire markets, and the FAIR Plan plus a difference-in-conditions wrap. Home hardening can improve both eligibility and price. The worst move is to let coverage lapse.
Frequently asked questions
Why is home insurance so hard to get in California?
Record wildfire losses led major carriers to pause new business or non-renew policies in fire-prone areas, shrinking the admitted market. Many homeowners have been pushed to the FAIR Plan, the insurer of last resort, whose policy count has more than doubled since 2022.
How many people are on the California FAIR Plan?
More than 668,600 policies were in force by the end of 2025, up about 44 percent in a year and up from roughly 270,000 in 2022, with total exposure around 724 billion dollars. These figures shift over time.
Is the California insurance market getting better?
There are early signs of stabilization, with FAIR Plan growth slowing in late 2025 and a state Sustainable Insurance Strategy aimed at drawing carriers back. It is a gradual process, and fire-prone areas remain challenging.
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