CA’s Spreading Homeowners Insurance Crisis

CA’s Wildfire-Driven Insurance Crisis Spreads to Lower-Risk Homes

Insurers have stopped covering homes in some California neighborhoods at lower risk of wildfire damage, forcing thousands of homeowners to turn to the state’s insurer of last resort, known as the FAIR Plan. That coverage was intended to be a backstop for those unable to obtain insurance on the private market because they live in areas at high risk for wildfires.

Enrollment in FAIR surged 43% between September 2024 and December 2025, as insurers pulled out of the state following a string of devastating wildfires. But according to an analysis by Bloomberg News, 14% of current FAIR policies cover properties residing largely in urban areas with low fire risk.

“What we’re seeing is that the infection of the market that existed in the high-fire-risk areas has spread into the normal parts of the market,” said Michael Wara, director of Stanford University’s Climate and Energy Policy Program. (INSURANCE JOURNAL)

—Compiled by SNCJ Managing Editor KOREY CLARK