What Just Happened
The California Department of Insurance has approved a 29.1% average statewide rate increase for the CA FAIR Plan, effective October 15, 2026. This is the largest approved rate hike the FAIR Plan has seen in recent history — and it comes on the heels of a catastrophic 2025 wildfire season that left the plan scrambling to cover its losses.
The FAIR Plan originally requested a 35.8% increase. The CDI approved 29.1%. For context, previous major increases were roughly 20% in 2019 and about 16% in both 2021 and 2023. This year’s number eclipses them all.
“The 29.1% is a statewide average. For homeowners in higher wildfire risk zones, the increase to their wildfire premium could be far higher — some will see their wildfire premiums double.”
Why Is This Happening?
The FAIR Plan was never designed to be California’s primary home insurer — it was built as a temporary last resort. But over the past five years, it has become the only option for hundreds of thousands of Californians as major private carriers pulled back or exited the state entirely.
Then came January 2025. The Los Angeles wildfires alone generated an estimated $4 billion in losses for the FAIR Plan — forcing it to assess member insurance companies $1 billion just to stay solvent. That financial reality is the direct driver behind this rate increase.
How We Got Here: A Timeline
2018
FAIR Plan carries ~126,700 policies statewide. A niche backstop, mostly in known wildfire corridors.
2021–2023
Major carriers — State Farm, Farmers, Allstate, Travelers — pause or restrict new policies. FAIR Plan enrollment surges past 272,000.
2024
FAIR Plan residential exposure reaches $603 billion. Premiums hit $1.4 billion — up 15x from $87.2M in 2018.
Jan 2025
LA wildfires devastate Southern California. FAIR Plan faces ~$4B in losses. Member companies assessed $1 billion.
Mid-2025
FAIR Plan policies surpass 646,000+. Enrollment up over 140% compared to 2022.
Oct 15, 2026
29.1% rate increase takes effect. Highest in FAIR Plan history. High-risk zone policyholders may see wildfire premium components double.
⚠ Important: Your Actual Increase May Be Higher
The 29.1% is a statewide average. If your property sits in a wildfire-prone zone — and much of Southern California does — your individual wildfire-related premium component could increase significantly more than that average. The only way to know for certain is to review your specific policy and location risk tier.
What This Means for Southern California Homeowners
If you’re currently on a FAIR Plan policy in the Westminster, Fountain Valley, Irvine, or broader Orange County area, October 15, 2026 is a date to circle on your calendar. Your renewal could look dramatically different — and if you’re in a higher-risk ZIP code, the increase may far exceed the 29.1% headline number.
Equally important: the FAIR Plan only covers the basics. It doesn’t include liability, theft, personal property, or additional living expenses in the same comprehensive way a standard homeowners policy does. For many families, it’s an expensive, stripped-down policy — and now it’s getting more expensive.
What You Should Do Right Now
- 1Review your current policy. Know exactly what your FAIR Plan covers and what it doesn’t. Check your renewal date relative to October 15, 2026.
- 2Shop the private market again. Carriers who retreated are beginning to return to California under the Sustainable Insurance Strategy. You may qualify for a private policy that costs less and covers more.
- 3Ask about a wrap policy. If you must stay on the FAIR Plan, a companion “Difference in Conditions” (DIC) policy can fill the coverage gaps at a fraction of the cost of a full replacement.
- 4Document your home hardening improvements. The FAIR Plan and private carriers are offering discounts for defensible space, fire-resistant materials, and updated systems. These can offset rate increases.
- 5Call an independent agent. An independent agent isn’t tied to one carrier — they can shop multiple markets simultaneously to find you the best combination of coverage and price before rates reset in October.
A Note on Mercury Insurance
There is some good news on the private market front. Mercury Insurance recently received a 6.9% rate increase approval from the CDI — and as part of that agreement, committed to writing over 6,000 new policies in the near term and more than 38,000 long-term. For homeowners currently stuck on the FAIR Plan, Mercury’s expanded appetite may represent an off-ramp worth exploring.
