California FAIR Plan Announces 29.1% Rate Hike for Homeowners This Fall
California’s insurer of last resort is about to get significantly more expensive for policyholders starting Oct. 15, 2026.
The California FAIR Plan will be increasing its rates by an average of 29.1% for its more than 675,000 customers — the highest rate bump in recent history.
The exact increase depends on each homeowner’s situation. Those living in areas at a high risk of wildfire may pay significantly more. Some will see their wildfire premiums double.
“It’s definitely going to cause pain for some people,” said Karl Sussman, broker and insurance expert.
Policyholders with less risk will be less impacted. In residential, urban communities in the Bay Area, some might even see reductions.
The FAIR Plan asked for a higher rate hike of 35.8% from the California Department of Insurance, which oversees rate setting, last September.
A study released in June by Stanford University researchers found California homeowners insurance premiums are up 84% since 2020. FAIR Plan enrollment has nearly tripled — from under 2% to 5% of homes.
The FAIR Plan was designed as a temporary way to get coverage, not as a long-term insurance provider. But years of catastrophic fire damage and inflation prompted traditional insurers to pull back from areas at high risk of wildfire damage. For many Californians, the Plan became their first and only option. Half of homes in some high fire risk areas, such as Truckee, Nevada City, Malibu and Lake Arrowhead, are insured through the FAIR Plan.
As of June 2026, the FAIR Plan’s total exposure is $768 billion, reflecting an 11% increase since September 2025 and a 250% increase since September 2022. This dwarfs its direct cash balance, which sits between $200 and $400 million.
To pay out catastrophic claims, the Plan relies on reinsurance, bonds and the ability to get money from private insurance companies and surcharges on policyholders. Some insurance experts have questioned how the FAIR Plan spends its money, citing bureaucratic inefficiencies and lengthy and costly legal battles, such as its fight to avoid paying for smoke damage.
While enrollments in the FAIR Plan are still increasing, the pace of growth appears to be slowing, according to recent data from the FAIR Plan. New business this year is down 25% over last year. Insurance regulators are hopeful this is a sign reforms passed through in the Sustainable Insurance Strategy are working.
At the same time, California is seeing more traditional insurers writing policies again.
“We have markets that didn’t exist a month ago. And in another month, we’ll probably have more markets, again, that didn’t exist,” Sussman said. “So, while we see the FAIR Plan rates going up, we [also] see the ability for people that are with the FAIR Plans to go and find private insurance, which, at the end of the day, is what we want them to be doing.”