As wildfires become more frequent and severe, California’s once-stable insurance market is undergoing a rapid transformation. In recent years, many major insurers have either withdrawn completely or stopped offering new policies in high-risk areas, citing escalating claims, regulatory barriers, and market uncertainty. As a result, homeowners are increasingly turning to the FAIR Plan—once a last-resort option but now a primary safety net for many. crawco.com+1crawco.com+3Investopedia+3insurance.ca.gov+3
In response, the California Department of Insurance has launched sweeping reforms under Commissioner Lara’s Sustainable Insurance Strategy. Insurers that adopt approved wildfire catastrophe models can now open new policies in previously restricted areas. These reforms include mandatory coverage in distressed zones and expanded rate-filing options—marking a major shift in how insurance is delivered and priced in the state. insurance.ca.gov+2insurance.ca.gov+2
Still, the market remains under strain. Department-approved catastrophe models and the ability to pass on reinsurance costs may lead to higher premiums as state regulators work to balance availability with affordability. deloitte.com+15San Francisco Chronicle+15thinkbrg.com+15
Against this backdrop, our role is to provide clarity and guidance—whether that means leveraging the Sustainable Insurance Strategy to secure voluntary market solutions or helping clients secure FAIR Plan policies when needed. We stay informed so you don’t have to.
