California, October 12, 2025

News Summary

The California FAIR Plan is seeking a significant 35.8% increase in homeowners insurance rates, effective April 2026. This proposal follows substantial losses from recent wildfires, marking the largest hike in seven years. Approximately 591,000 policyholders may see rate hikes, with some facing increases over 300%. Amid growing concerns over claims management and dissatisfaction from residents, the California Department of Insurance is investigating the FAIR Plan’s practices. Consumer advocates urge a review of the proposed rate change before any approvals are made.

California

The California FAIR Plan is proposing a historic 35.8% rate increase for homeowners insurance, effective from April 1, 2026, pending approval from the California Department of Insurance. This increase would represent the largest hike in at least seven years, driven by billions of dollars in losses resulting from the January firestorms that struck the state.

The FAIR Plan, which operates as a high-risk insurance pool created by the state, had previously implemented rate increases of 20.3% in 2019 and almost 16% increases in 2021 and 2023. The organization has reported approximately $4 billion in losses from recent wildfires, further burdening its member carriers with an assessment of $1 billion to cover claims.

This proposed rate increase is not uniform; around half of the policyholders could see hikes ranging from 40% to 55%, while some homeowners may actually benefit from decreases of up to 78%. In stark contrast, a small number of policyholders may face increases exceeding 300%. Discounts of up to 15% are available for homeowners who implement fire risk reduction measures.

Since 2021, the number of policyholders in the FAIR Plan has more than doubled, reaching 591,000 this summer. This surge is largely attributed to insurers retreating from the market due to escalating wildfire risks. Many homeowners have found that transitioning to the FAIR Plan often results in premiums doubling or even tripling when compared to previous private market rates, with average costs around $3,200 annually, more than twice that of a standard policy.

It is important to note that the FAIR Plan only covers fire damage, necessitating additional policies for liability and other risks, which can further increase overall costs for homeowners. The proposed rate increase has come under fire due to dissatisfaction with the FAIR Plan’s handling of smoke-damage claims from the January fires, leading to multiple complaints and legal proceedings initiated by affected homeowners.

In a recent ruling, a Superior Court judge found that the FAIR Plan’s smoke damage policy violated state law, prompting state regulators to issue a cease-and-desist order. Furthermore, Governor Gavin Newsom has criticized the FAIR Plan’s handling of claims as “unscrupulous and unfair.” In response to the growing concerns, the California Department of Insurance is currently investigating the FAIR Plan’s practices regarding smoke-damage claims, with potential fines on the horizon.

The FAIR Plan asserts that the proposed rate hike is essential to managing anticipated claims and expenses, and it reflects the evolving risks of wildfires. New insurance guidelines permit the inclusion of wildfire catastrophe models and reinsurance costs in rate calculations to more accurately reflect future conditions.

Other insurers, such as Mercury and CSAA, have been requested to implement smaller rate increases of 6.9% while pledging to remain active within the California marketplace. Consumer advocacy groups are calling for a comprehensive review of the FAIR Plan’s rate change request and recommending a freeze on any increase until the smoke damage claims review is finalized.

FAQ

Deeper Dive: News & Info About This Topic

• Coastside News
• Wikipedia: California Fair Plan
• Los Angeles Times
• Google Search: California Fair Plan
• San Francisco Chronicle
• Encyclopedia Britannica: Homeowners Insurance
• CBS News
• Google News: California Fair Plan rate hike

Author: STAFF HERE BEVERLY HILLS WRITER

The Beverly Hills Staff Writer represents the experienced team at HEREBeverlyHills.com, your go-to source for actionable local news and information in Beverly Hills, Los Angeles County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Rodeo Drive Concours d'Elegance, the Beverly Hills artSHOW, Concerts on Canon, and holiday celebrations throughout the city. Our coverage extends to key organizations like the Beverly Hills Chamber of Commerce and Visit Beverly Hills, plus leading businesses in luxury fashion, hospitality, and entertainment that drive the local economy. As part of the broader HERE network, including HERELosAngeles.com, HERESantaAna.com, HEREHuntingtonBeach.com, and HERECostaMesa.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.