Home insurance is becoming one of the biggest topics in California real estate, and there is a new development homeowners and buyers should be aware of.
California’s FAIR Plan, the state’s insurer of last resort for homeowners who are unable to obtain traditional insurance coverage, has received approval for a 29.1% rate increase on certain policies beginning October 15.
The largest increases are expected in areas considered to have higher wildfire risk.
Some key takeaways:
• The FAIR Plan now covers more than 668,000 policies statewide, a 44% increase from the previous year.
• Total exposure has grown to approximately $724 billion, reflecting the growing number of homeowners relying on the program.
• Not all policyholders will see the same increase. Homeowners in higher-risk wildfire areas could experience larger premium increases, while some lower-risk areas may see smaller changes or even reductions.
• California is also allowing insurers to use updated catastrophe modeling tied to wildfire and climate risk when setting rates.
Consumer advocates have expressed concerns that these changes may continue to increase insurance costs for many California homeowners who are already facing affordability challenges.
Why does this matter?
Insurance costs can significantly impact your monthly housing expenses, purchasing power, and overall affordability when buying or owning a home. In many cases, insurance is becoming just as important a consideration as mortgage rates and property taxes.
If you’re considering buying in a higher-risk area, thinking about selling, or simply want to understand how these changes could affect your home and finances, we’re happy to help.
Feel free to reach out anytime with questions.
