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California FAIR Plan approves 29.1% rate increase
The California FAIR Plan increase takes effect Oct. 15 as lawmakers debate who pays for wildfire losses, with FAIR Plan exposure reaching $750 billion by March.
California's homeowners insurance market is facing another round of higher rates, with the California FAIR Plan approving a 29.1% increase that takes effect October 15, according to the California Department of Insurance, per Insurance Business.
The plan initially requested a 35.8% increase, while State Farm's 17% emergency rate increase, approved in May 2025, was confirmed in a March settlement. Insurance Business also notes the admitted carrier market remains restricted, with State Farm and Allstate closed to new business statewide, while Mercury, Farmers, and AAA/CSAA are among the carriers writing new policies.
FAIR Plan enrollment grew 43% between September 2024 and December 2025, driven in part by the January 2025 Los Angeles wildfires. By March, FAIR Plan exposure reached $750 billion, up 242% since September 2022, and in the highest-risk ZIP codes about 41% of residential structures reportedly carry a FAIR Plan policy compared with 4% in lower-risk areas.
The changes come as California lawmakers consider how wildfire costs should be allocated between utilities, insurers, and policyholders. Insurance Business points to Senate Bill 254, signed by Gov. Gavin Newsom, which required a study of wildfire liability options including eliminating inverse condemnation, while APCIA estimates that shifting utility wildfire liability to insurers could raise statewide homeowners premiums by 10% to 20%.