California's last-resort insurance plan faces insolvency risk as homeowners flee private markets
HP
Hayden Pemberton
homeowners insurance rate hike · Apr 9, 2026
Source: DojiDoji Data Terminal
Homeowners in fire-prone areas are opting into the state's last-resort insurance program rather than using it as a last resort. This shift is driven by the cost of FAIR Plan policies in some areas becoming comparable to traditional coverage options.
The trend is a result of the the California Department of Insurance being slow to approve rate increases for the FAIR Plan.
As insurers such as State Farm and Allstate have paused writing new home policies in California, hundreds of thousands of homeowners have enrolled in the FAIR Plan. The program is a state-mandated entity operated and financed by private insurers to provide bare-bones disaster protection.
The rapid expansion of the program now jeopardizes its ability to pay claims.