California's 'last resort' property insurer seeks rate hike, ringing national alarm bells

In recent years, hundreds of thousands of Californians have purchased home insurance from a state-managed “last resort” insurance pool that has grown rapidly as private insurance companies have fled the market.

Now, in the wake of the devastating Los Angeles wildfires earlier this year, the Fair Access to Insurance Requirements (FAIR) Plan is seeking approval from the state for an average 36% rate hike, which would further squeeze homeowners who have no other options for coverage.

Insurance experts say it’s a national warning sign, as the effects of climate change cause private insurance companies to pull back on coverage in disaster-prone areas, leaving states and their residents to assume more of the risk. Fewer homeowners will be able to purchase private insurance in the future, and even those who do may face higher premiums as companies charge more to pay for the FAIR Plan losses.

In some states, these state-managed insurance plans have grown from a handful of policies, as originally intended, to hundreds of thousands of homeowners. The plans charge high premiums and provide limited coverage.



https://stateline.org/2025/10/24/californias-last-resort-property-insurer-seeks-rate-hike-ringing-national-alarm-bells/