California, October 10, 2025
News Summary
The California FAIR Plan requests a 35.8% average insurance rate increase following $4 billion in wildfire losses. This increase, if approved, would be the largest since 2019. Homeowners in fire-prone areas may face larger hikes, while mitigation strategies could offer discounts. Reform bills signed by Governor Newsom aim to protect policyholders amidst scrutiny of the FAIR Plan’s practices.
California is facing a significant proposed uptick in insurance rates as the California FAIR Plan has requested an average rate increase of 35.8%. This request follows astronomical losses amounting to approximately $4 billion caused by wildfires in January 2025. If approved, this would mark the largest insurance rate hike since 2019, which saw an average increase of 20.3%.
The FAIR Plan, which was established to provide insurance coverage for homeowners unable to find policies elsewhere, has seen increasing demand as private insurers exit the market. This has made the FAIR Plan the only viable option for many homeowners in fire-prone areas. The request for a 35.8% increase comes in the aftermath of significant assessments that required member carriers to cover claims, amounting to $1 billion.
Rate increases in recent years have varied, with 16% increases recorded in both 2021 and 2023. Notably, a request in 2023 sought a 48.8% increase but was reduced by the insurance commissioner. The California Department of Insurance is currently reviewing the latest request, which must be approved before being put into effect.
The impact of the proposed rate increase will not be uniform, as the average hike will vary based on location and individual property risk. Homeowners situated in areas considered more prone to wildfires may experience steeper increases. However, those who take proactive steps in wildfire risk mitigation on their properties may benefit from discounts of up to 15% on their premiums.
In light of the challenges posed by wildfires, Governor Gavin Newsom has recently signed five bills aimed at reforming and improving the FAIR Plan. These bills include new financing methods and enhanced oversight intended to better protect policyholders.
Adding to the complexities facing the FAIR Plan are issues surrounding smoke damage claims from the January wildfires. Homeowners have filed lawsuits claiming that the FAIR Plan mishandled these claims. A Superior Court judge ruled in favor of the plaintiffs, stating that the FAIR Plan’s smoke damage policy was in violation of state law, a decision which has raised further scrutiny regarding the organization’s operational practices.
Consumer advocacy groups are actively opposing the proposed rate hike, urging regulators to delay any increases until ongoing issues related to smoke damage claims have been fully addressed. This call for action highlights the growing concerns about the fairness and accountability of the insurance system in the wake of devastating wildfires.
As the situation unfolds, it remains critical for California homeowners to stay informed and prepared for potential changes in their insurance coverage and costs.
FAQ
What average insurance rate increase is the California FAIR Plan requesting?
The California FAIR Plan has requested an average insurance rate increase of 35.8%.
What were the losses incurred by the FAIR Plan due to wildfires?
The plan incurred approximately $4 billion in losses due to wildfires in January 2025.
How does the proposed increase compare to previous rate hikes?
If approved, the rate hike would be the largest since 2019, which saw an average increase of 20.3%.
What can homeowners do to potentially lower their premiums?
Homeowners can receive discounts of up to 15% on their premiums if they implement wildfire risk mitigation strategies on their properties.
Key Features
| Feature | Details |
|---|---|
| Proposed Rate Increase | 35.8% |
| Losses from Wildfires | $4 billion |
| Largest Rate Hike since | 2019 |
| Previous Rate Increases | 20.3% in 2019, 16% in 2021, and 16% in 2023 |
| Discount for Mitigation | Up to 15% |
Deeper Dive: News & Info About This Topic
- CBS News – Bay Area Community and California FAIR Plan
- Los Angeles Times – California FAIR Plan Rate Hike
- Housing Wire – FAIR Plan Insurance Premium Increase
- Wikipedia: California FAIR Plan
- Google Search: California insurance rate hike
Author: STAFF HERE LOS ANGELES WRITER
LOS ANGELES STAFF WRITER The LOS ANGELES STAFF WRITER represents the experienced team at HERELosAngeles.com, your go-to source for actionable local news and information in Los Angeles, Los Angeles County, and beyond, specializing in "news you can use" with coverage of 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 from years of dedicated reporting and strong community input, including local press releases and business updates, while delivering top reporting on high-value events like the Academy Awards, LA Auto Show, and Los Angeles Marathon, extending coverage to key organizations such as the Los Angeles Area Chamber of Commerce and the Los Angeles Tourism & Convention Board, plus leading businesses in entertainment and technology like Warner Bros. and SpaceX, and as part of the broader HERE network including HEREAnaheim.com , HERECostaMesa.com , HEREHuntingtonBeach.com , and HERESantaAna.com , providing comprehensive, credible insights into Southern California's dynamic landscape. HERE Anaheim HERE Beverly Hills HERE Coronado HERE Costa Mesa HERE Hollywood HERE Huntington Beach HERE Long Beach HERE Los Angeles HERE Mission Viejo HERE San Diego HERE Santa Ana
