Homeowners insurance in California has been difficult to find in recent years, particularly for properties in higher fire-risk areas. In 2026, that market is beginning to shift.
Some insurers that had limited new business have started expanding again, while state reforms have changed how wildfire risk and reinsurance costs can be reflected in rates. The California FAIR Plan remains an important backstop, but it may no longer be the only option for some properties that had few alternatives a year or two ago.
For buyers and homeowners, the practical question is still property-specific: Can you get the required coverage, what will it cost, and how will that premium affect your mortgage payment?
Key Takeaways
- Availability is beginning to improve, but homeowners insurance in California still varies significantly by property, location, fire risk, construction, and mitigation.
- California’s Sustainable Insurance Strategy changed how insurers can account for wildfire risk and reinsurance costs, while tying those changes to increased writing commitments in higher-risk areas.
- The California FAIR Plan reported 696,562 policies in force as of June 2026, up 157% since September 2022. Its approved 29.1% average rate increase takes effect October 15, 2026, for new and renewing dwelling policies.
- California insurers are required to recognize qualifying wildfire-mitigation measures through the Safer from Wildfires framework, although the available discount varies by property and carrier.
- A statewide average premium is not a reliable estimate for a specific home. For mortgage planning, the most useful number is the actual quote for the property you are buying or already own.
Why Homeowners Insurance in California Became Harder to Find
Several pressures developed at the same time.
Wildfire losses increased significantly. The January 2025 Eaton and Palisades fires alone generated roughly 5,400 FAIR Plan claims, with about $3.5 billion paid out on those claims.
Rebuilding costs also increased. Higher construction labor and material costs raised the amount insurers could expect to pay after a major loss.
At the same time, California’s prior rate-setting framework limited how insurers could account for future wildfire risk and reinsurance costs. Rate filings also took an average of 236 days for approval.
As those pressures built, several insurers reduced new business or non-renewed existing policies, and more homeowners turned to the FAIR Plan.
What Changed Under the Sustainable Insurance Strategy
California announced the Sustainable Insurance Strategy in September 2023 as a broad effort to stabilize the property insurance market. Several pieces of the framework are especially relevant to homeowners:
| Change | What it does | Why it matters |
|---|---|---|
| Catastrophe modeling | Allows forward-looking wildfire models to be used in rate setting. | Rates can reflect current and projected wildfire risk rather than historical losses alone. |
| Reinsurance costs | Allows certain reinsurance costs to be reflected in California rates. | Removes one of the pricing constraints insurers cited when limiting business in the state. |
| 85% writing commitment | Creates an increased writing commitment in historically underserved, higher-risk areas for the largest insurers. | The goal is to expand standard-market availability in places that lost coverage. |
| FAIR Plan assessment limits | Places limits on how much FAIR Plan loss exposure can be passed to private insurers through assessments. | Reduces some of the open-ended exposure associated with FAIR Plan losses. |
The Department of Insurance also pairs these market reforms with the Safer from Wildfires regulations, which require insurers to recognize qualifying mitigation measures and provide information about wildfire risk and available ways to reduce it.
The overall goal is to give insurers more tools to price wildfire risk while increasing the amount of coverage available in areas that have had the most difficulty finding it.
Who Is Writing Homeowners Insurance in California Now?
Carrier appetite changes quickly, so any static list can become outdated. Recent changes do, however, show that some insurers are expanding rather than continuing to pull back.
Farmers removed its monthly cap on new California homeowners policies in late November 2025 after previously limiting new policies to 9,500 per month. Travelers notified the California Department of Insurance in April 2026 that it planned to expand its homeowners offering statewide.
Other insurers have filed rate changes under the newer framework rather than withdrawing. The source material for this update also notes a 6.9% January 2026 rate change for CSAA Mercury.
For a specific property, a licensed insurance broker with current carrier-appetite information is still a better source than a published list. Availability can depend on the address, construction type, roof, fire hazard designation, mitigation work, and other property-specific factors.
What Does the Average Cost of Homeowners Insurance in California Tell You?
A statewide average can show the direction of the market, but it is not a reliable estimate for an individual home.
Insurance pricing can vary significantly between properties based on wildfire exposure, construction, roof type, replacement cost, mitigation features, and carrier guidelines. Two homes in the same state can have very different premiums.
For broader context, Insurify reported a national average annual homeowners insurance premium of $2,948 after a 12% increase in 2025 and projected another 4% national increase in 2026. Its 2026 projection for California was a 16% increase.
Those figures are useful for understanding the trend, not for estimating a specific payment. If you are buying or refinancing, your lender will use the actual insurance premium for the property, which is another reason to get a quote early.
The California FAIR Plan Still Plays a Major Role
The California FAIR Plan provides basic property insurance when coverage is unavailable through the standard market. Its role expanded significantly as traditional insurers reduced their California business.
As of June 2026, the FAIR Plan reported 696,562 policies in force, up 157% since September 2022, with $768 billion in exposure.
Its approved 29.1% average rate increase takes effect October 15, 2026, for new and renewing dwelling policies. Because the increase applies at each policy’s renewal, policyholders will see the change at different times.
The FAIR Plan also does not provide the same coverage as a standard homeowners policy. The base dwelling form is a named-peril policy, and many homeowners pair it with a Difference in Conditions policy. Our guide to what the California FAIR Plan covers explains those coverage differences in more detail.
As standard-market availability improves, some properties currently insured through the FAIR Plan may have additional options at renewal. A licensed insurance broker can confirm whether a different carrier is willing to consider the specific property.
California Homeowners Insurance News Worth Tracking
Several regulatory and market changes could continue to affect homeowners insurance in California.
Zone 0 defensible space regulations. California’s Board of Forestry and Fire Protection approved Zone 0 regulations on August 20, 2026, establishing an ember-resistant area within five feet of a structure. At the time of this draft, the package still required Office of Administrative Law review before taking effect, so the current status should be confirmed before relying on a compliance date.
New insurance laws effective January 1, 2026. AB 888, the California Safe Homes Act, provides grant funding for certain fire-safe roof and Zone 0 mitigation work. SB 429 funds development of a publicly available wildfire catastrophe model. AB 226 gives the FAIR Plan access to additional financial tools, and SB 495 changes certain contents-payment requirements after total losses.
Updated fire hazard maps. State Responsibility Area designations became effective April 1, 2024, and updated Local Responsibility Area maps were released in phases during early 2025. An older listing or disclosure may not reflect the property’s current designation.
FAIR Plan depopulation. As more standard-market carriers resume writing, some properties may be able to move away from the FAIR Plan. How quickly that happens will be one of the clearest indicators of whether the reforms are expanding private-market availability.
If You’re Buying a Home in California
Treat homeowners insurance as part of the financing process, not as paperwork to handle right before closing.
Lenders qualify borrowers using the full monthly housing payment, including homeowners insurance. A higher premium can increase the debt-to-income ratio and reduce the amount a buyer qualifies to borrow.
For a property that needs FAIR Plan coverage, the lender may need to account for both the FAIR Plan premium and the separate DIC premium.
If you are considering a property in a higher fire-risk area, our guide to buying with homeowners insurance in a California high fire area explains what to check before removing contingencies.
The practical rule is simple: get the insurance quote for the specific property early enough that you can understand the payment before you are committed to the transaction.
If You Already Own Your Home
Review your insurance options before renewal rather than waiting for the new premium to arrive.
If your property has qualifying wildfire-mitigation features, ask your insurance professional whether those improvements are reflected in your current policy and whether additional work could qualify for a discount.
If you are currently on the FAIR Plan, you can also ask whether a standard-market carrier is willing to consider the property now.
If the premium changes and your insurance is paid through escrow, the mortgage payment usually changes later through an escrow analysis. Our guide to why your mortgage payment went up explains how a higher premium can create both a larger ongoing escrow payment and a temporary shortage repayment.
And if you change insurance carriers while your premium is paid through escrow, the order of the switch matters so your servicer has the correct policy information.
If You Receive a Non-Renewal Notice
A non-renewal means the insurer does not plan to continue the policy after its expiration date. It is different from an immediate cancellation, so the existing coverage remains in place until the policy ends.
California also has wildfire-related non-renewal protections that can apply after a Governor’s emergency declaration. Under California Insurance Code section 675.1, certain residential policies in identified fire areas and adjacent ZIP codes may receive a one-year protection from cancellation or non-renewal for wildfire risk.
Whether a particular property falls under a moratorium depends on the specific emergency declaration and location. Confirm applicability with the California Department of Insurance or an appropriate licensed professional.
If no moratorium applies, begin looking for replacement coverage as soon as the notice arrives. Avoid a lapse between policies, and if you have a mortgage, send the replacement declarations page to your servicer once the new policy is in place.
Frequently Asked Questions
Is homeowners insurance in California getting easier to find?
Availability is beginning to improve in some parts of the market. Farmers removed its cap on new California homeowners policies in late 2025, and Travelers notified the Department of Insurance in April 2026 that it planned to expand statewide. Whether coverage is available still depends on the specific property.
Why did so many insurers stop writing homeowners insurance in California?
Wildfire losses increased, rebuilding costs rose, and California’s prior rate-setting framework limited how insurers could account for future wildfire risk and reinsurance costs. Several carriers responded by limiting new business or non-renewing policies.
Who is writing homeowners insurance in California now?
The list changes frequently as insurers adjust what they are willing to write and where. Some carriers have expanded again, but availability varies by property. A licensed insurance broker with current carrier information is the best source for a particular address.
What is the average cost of homeowners insurance in California?
A statewide average is not a reliable estimate for a specific property because premiums can vary widely based on location, wildfire exposure, construction, replacement cost, roof type, mitigation, and carrier guidelines. Use an actual quote for the property when planning a mortgage payment.
Is homeowners insurance required in California?
California law does not generally require every homeowner to carry homeowners insurance. Mortgage lenders do require property insurance as a condition of most home loans, so buyers financing a home will typically need coverage that meets the applicable loan requirements.
What is the Sustainable Insurance Strategy?
The Sustainable Insurance Strategy is California’s regulatory framework intended to improve property insurance availability. It allows insurers to use forward-looking wildfire catastrophe models and account for certain reinsurance costs, while also increasing writing commitments in historically underserved, higher-risk areas.
Will the FAIR Plan rate increase affect my mortgage payment?
It can affect the escrow portion of the payment if your homeowners insurance is paid through escrow. The 29.1% average increase takes effect October 15, 2026, at each policy’s renewal, and the mortgage-payment effect generally appears later through an escrow analysis.
Can I move off the FAIR Plan now that carriers are returning?
Possibly. Some properties that previously had no standard-market option may have additional choices as carrier appetite changes. A licensed insurance broker can confirm whether another insurer will consider your property and what coverage is available.
What should I do if I get a non-renewal notice in California?
Review the notice as soon as it arrives, confirm whether a wildfire-related non-renewal moratorium applies, and begin arranging replacement coverage if needed. If you have a mortgage, avoid any lapse in coverage and provide your servicer with the new policy information once it is bound.
What This Means for Your Mortgage
Homeowners insurance in California is still a property-by-property issue, even as the broader market begins to change.
Whether you are buying or already own the home, the most useful information is the actual coverage available for your address and the real premium attached to it. That premium is part of the housing payment your lender uses when evaluating a purchase or refinance.
If you want to understand how an insurance quote affects your payment or qualification, contact JVM Lending or call (855) 855-4491.
JVM Lending is a mortgage lender, not an insurance agency or legal advisor. Insurance coverage, carrier selection, non-renewal protections, and mitigation credits should be confirmed with the appropriate licensed or regulatory professional.
Sources
- California Department of Insurance, Sustainable Insurance Strategy.
- California Department of Insurance, Safer from Wildfires regulation, mitigation discount and wildfire risk score requirements.
- Insurance Journal, April 27, 2026, Travelers expansion in California.
- California FAIR Plan, Key Statistics and Data.
- California Department of Insurance.
- Insurify, home insurance price projections, national average premium and 2026 state-level projections.
- California Board of Forestry and Fire Protection.
- California Department of Insurance, new insurance laws.
- Office of the State Fire Marshal, Fire Hazard Severity Zones, SRA designations.
