FAIR plan fire insurance rates to jump 29% this October

East County News Service

(East County San Diego) — Homeowners on California’s insurer of last resort are facing the steepest rate increase the program has approved in years — and East County residents, in a mix of high-fire-risk canyons and lower-risk suburban neighborhoods, are likely to feel it unevenly.

The California Department of Insurance recently approved a statewide average rate increase of 29.1 percent for the California FAIR Plan, effective for new and renewing policies starting Oct. 15. The 29.1 percent figure is a statewide average, not a flat increase.

The FAIR Plan, created as a temporary safety net for properties that can’t get coverage on the private market, now covers more than 675,000 homes and businesses across California — a number that has grown sharply as private insurers pulled back from wildfire-prone areas in recent years.

What’s changing and why

The FAIR Plan first requested a 35.8 percent rate increase in a filing with the Department of Insurance in September 2025 — which would have been its largest increase ever. The Department’s review, which brought that figure down to 29.1 percent, became public in mid-to-late May 2026. Even after the reduction, it’s the biggest single increase the program has taken in recent years, well above the roughly 20 percent increase in 2019 and the 16 percent increases approved in 2021 and 2023.

How much any individual homeowner’s bill changes will depend heavily on wildfire risk.

Properties in high-risk zones — including many in East County, with dense brush, limited defensible space and remote access — are expected to see increases above the average, with some wildfire-related premium components potentially doubling. Homeowners in lower-risk, more urban or suburban areas may see increases below the average. Some could see no change or even a decrease.

The increase follows several years of mounting wildfire losses statewide and rapid growth in FAIR Plan enrollment. Policy counts grew 44 percent in 2025 alone, reaching roughly 668,600 by year’s end, up from about 464,900 the previous fall — a surge that came just months before the catastrophic Los Angeles-area wildfires of January 2025. The fires in L.A. generated an estimated $4 billion in FAIR Plan losses and forced the plan to assess its member insurance companies $1 billion just to cover claims.

The FAIR Plan’s total exposure has since reached roughly $768 billion, an 11 percent increase since September 2025 and a 250 percent increase since September 2022 — dwarfing its cash reserves, which sit between only $200 million and $400 million.

A Stanford University study released in June 2026 found California homeowners insurance premiums have risen 84 percent since 2020, and that FAIR Plan enrollment has nearly tripled statewide, from under 2 percent to 5 percent of all homes. Nationally, the pace of new FAIR Plan sign-ups has begun to slow this year as more private insurers return to the market.

The regulatory backdrop

In a statement, the FAIR Plan said the approval “generally aligned with the Sustainable Insurance Strategy guidelines, which incorporate CDI-approved catastrophe modeling and account for the net cost of reinsurance.”

The Sustainable Insurance Strategy is Insurance Commissioner Ricardo Lara’s broader regulatory framework, which allows insurers to factor climate-driven wildfire risk into their pricing more directly than before — something the industry had long sought.

In exchange, insurers participating in the strategy are expected to expand underwriting in fire-prone areas they had previously avoided, which state officials point to as a reason for cautious optimism about the private market’s return. Insurance regulators say several homeowner insurance groups have expanded their California underwriting this year, compared with essentially none in 2025.

A key point for FAIR Plan customers: the basic policy is not equivalent to a standard homeowners policy. It covers fire, smoke, lightning and internal explosion damage — but not theft, liability, vandalism, water damage or several other perils a conventional policy would include.

Most FAIR Plan customers pair their coverage with a separate Difference in Conditions policy from a private insurer to fill those gaps, which adds to the total cost of coverage.

Ways to offset the increase

Homeowners have some ability to reduce the hike through fire-hardening measures. The FAIR Plan’s wildfire mitigation discount program allows policyholders to stack multiple qualifying upgrades — including Class A fire-rated roofing, five-foot noncombustible zones around the home, and ember-resistant vents — for meaningful savings on the wildfire portion of their premium.

Local resources are available to help. The Fire Safe Council of San Diego County, based in Lakeside, offers free home wildfire risk assessments and can connect qualifying low-income homeowners with its Defensible Space Assistance Program, which pays for professional brush clearance and hazardous tree removal. The council can be reached at (619) 562-0096 or info@rcdsandiego.org.

San Diego County also has stricter defensible space rules than the state minimum, requiring 50 feet of clearance in Zone 1 around a home. Cal Fire offers a self-assessment tool at fire.ca.gov/dspace to help homeowners gauge how prepared their property is.

For income-qualified residents in eligible areas, the county’s Home Hardening Program — part of a state partnership between Cal OES, Cal Fire and local fire agencies — can help pay for retrofits like ember-resistant vents and fire-rated roofing. Residents can inquire through San Diego County Fire at (858) 974-5929 or HomeHardening.SanDiego@sdcounty.ca.gov.

Homeowners should check their renewal date — the new rates apply to any policy renewing or newly issued on or after Oct. 15 — and ask their agent or the FAIR Plan directly what mitigation discounts they may qualify for.

They should also confirm whether they need a DIC policy to cover gaps the FAIR Plan doesn’t, and consider shopping the private market again if they haven’t recently, since capacity has reportedly increased in some previously hard-to-insure areas.

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