California FAIR Plan Increases Insurance Rates by 29 Percent

The state's insurer of last resort has raised premiums as enrollment for residential and commercial policies continues to climb.

Updated on Oct. 27, 2026 in Insurance

Bold flat-color editorial illustration of a geometric house facade, representing the state-run property insurance program in California. — The California FAIR Plan has implemented a 29.1 percent rate increase for homeowners effective October 15, 2026, amid rising market coverage gaps. AI Illustration. Upload story photo >

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Do you feel current home insurance premiums are becoming unaffordable for your household?

The California FAIR Plan has implemented an average 29.1 percent increase in homeowners insurance rates as of October 15, 2026. This move follows a period of rapid growth for the state-mandated program, which now serves between 665,000 and 700,000 policyholders.

Why it matters

The rate hike reflects the challenges of California's property insurance market, where major private insurers have reduced operations due to high wildfire risks. State law requires that the FAIR Plan provide basic protection to residents who cannot secure coverage through traditional providers.

FAIR Plan enrollment has grown by 4.3 times since 2019, currently covering between 665,000 and 700,000 residential and commercial policies. In 574 distressed ZIP codes, enrollment has expanded in 93 percent of areas.

The players

California FAIR Plan Association

This state-mandated organization is funded and operated by private insurers to provide basic property coverage when no other options exist.

The details

The FAIR Plan provides coverage for fire, lightning, smoke damage, and internal explosions, though it does not include liability protection. To address coverage gaps, approximately 43 percent of policyholders also carry a separate Difference in Conditions policy.

The California FAIR Plan was established in 1968.
In September 2019, the FAIR Plan held roughly 155,000 residential policies.
Average statewide homeowners premiums rose 84 percent between 2020 and 2026.
As of March 2026, 43 percent of policyholders maintained additional coverage.
The 29.1 percent rate increase took effect on October 15, 2026.

Market Dynamics

This rate adjustment follows the 2023 Sustainable Insurance Strategy, which permits insurers to incorporate forward-looking catastrophe models into their rate filings. This marks a shift toward updated modeling practices in response to evolving risk landscapes.

Homeowners should review their current coverage as the FAIR Plan does not provide liability protection. Policyholders may need to budget for the increased premium costs while evaluating whether supplemental Difference in Conditions policies remain necessary for their risk profile.

The takeaway

Property owners in high-risk areas should continue to monitor their insurance options as the state market adjusts to wildfire losses. Consult with a licensed agent to determine if additional liability coverage is required to protect your assets.