The FAIR Plan, California’s last-resort insurance program for homeowners needing fire coverage, is seeking approval for steep rate hikes averaging 35.8%, though some policyholders could actually see their premiums drop.

Under the proposal, sent to state regulators Sept. 29, insurance costs would increase for about four in five of the plan’s more than 550,000 homeowner policies across California. The large majority of rate hikes would range from 5% to 60%.

The remaining roughly 97,000 policyholders — including hundreds in Alameda County and parts of the South Bay and Peninsula — would see a rate cut, with most deductions no more than 50%.

If approved by the state insurance department, the changes could go into effect as soon as April 1, 2026.

The FAIR Plan is a state-created, privately run high-risk insurance pool required to offer coverage to property owners who’ve been dropped by their providers or are unable to find coverage elsewhere. The plan often costs two or three times as much as a traditional policy and only offers basic fire protection, meaning homeowners generally need to purchase additional insurance.

In a statement, the FAIR Plan said the overall rate increase is necessary to offset the increasing risk of climate-driven wildfires.

“By statute, FAIR Plan rates must be sufficient to pay anticipated claims and expenses,” the plan said in a statement.

As insurers have ended coverage for hundreds of thousands of homeowners in recent years amid worsening wildfire seasons, the number of residential FAIR Plan policies has more than doubled to 590,642 as of June, according to the plan.

The FAIR Plan calculated its rate hike request using new guidelines approved by the California Department of Insurance late last year, which allow insurers to set premiums based on the growing threat of climate change. In exchange, insurance companies are expected to write additional standard homeowner polices in fire-risk areas.

While experts say the changes will likely lead to increased premiums, the FAIR Plan said that under the old rules, it would have sought to raise rates even higher to an average of 80%. It declined to explain why the recent reforms prompted a smaller rate hike proposal or why some areas would see rates increase while others would see them fall.

In recent months, some of the state’s largest home insurers, including Mercury and CSAA, have used the new guidelines to request rate hikes of 6.9% while committing to “remain and grow in the state,” according to the insurance department.

In a statement, the department said it will evaluate the FAIR Plan’s request using “the data-driven process we use for all rate change applications.”

Consumer advocates urged the department to closely scrutinize the proposal.

“A rate increase of that size would be devastating to FAIR Plan policyholders who are already paying too much for too little coverage,” said Carmen Balber, executive director of Los Angeles-based Consumer Watchdog.