California FAIR Plan raising rates 29% — but insurance hike could have been worse
Many California homeowners who rely on the state’s insurer of last resort will see major rate increases later this year.
Average rates for California’s FAIR Plan, which provides fire coverage for Californians when other companies refuse to, will increase 29% on Oct. 15.
That rate hike is down from the 36% increase the FAIR Plan sought last year in response to the devastating fires in Los Angeles in January 2025.
Exactly how much customers’ rates will change later this year depends on their circumstances. Roughly a quarter will see their rates decrease up to 80% and about half of homeowners will experience rate increases between 30% and 50%, according to the San Francisco Chronicle. Some customers will see even higher premiums.
Following years of devastating wildfires in the Golden State and increased risk of future fires, insurance companies have been reducing the number of policies sold in California. In turn, homeowners are forced to resort to the state-created, privately run insurer. Last year, the plan hit a record number of policies, 668,600, in December.
Michael Soller, a spokesperson for the Department of Insurance, said that the insurance market is beginning to stabilize. In the first quarter of 2026, the FAIR plan added 16,000 residential policies, which represented a sharp decline from the two previous years when the number of new policies each quarter ranged from 35,000 to 50,000, according to numbers from the department.
“Expanded coverage options and greatly slowed growth of the FAIR Plan are leading indicators of the emerging health of California’s insurance market,” Soller said in a statement. “Wide-scale adoption of proven mitigation measures can help secure the safety and future insurability of communities.”
Soller noted that as of May 2026, nine insurance groups that offer plans in California have sought rate increases below 7%. He said this was evidence of the state’s insurance industry commitment to stay and grow in California.
This story was originally published May 21, 2026 at 11:54 AM.
