REDDING, Calif. — Homeowners insured through the California FAIR Plan could soon see much higher insurance costs as the state’s insurer of last resort raises rates because of wildfire risk.
The California FAIR Plan will raise homeowner insurance rates by about 29% starting Oct. 15 for new and renewed policies this fall. FAIR Plan officials said the California Department of Insurance approved the increase.
Redding insurance agent Mike Littau of Goosehead Insurance said many people in the Northstate could see even steeper increases.
“Here in the Redding area, we’re seeing rate increases averaging between 30% and 40%,” Littau said.
Littau said homeowners across California are seeing double-digit insurance increases because of wildfire risk and past claims. He said insurance companies are raising rates after years of major losses.
“Every time there’s a rate increase with any company, it’s devastating,” he said.
Littau said homeowners with manufactured homes could be hit the hardest as many rely on the FAIR Plan for coverage.
“Many people with manufactured homes are on the California FAIR Plan,” he said.
On social media, some viewers expressed frustration over the increase, while others said they are already searching for new insurance providers.
In its statement, the FAIR Plan said,
“The California FAIR Plan appreciates the California Department of Insurance’s (CDI) approval of its recent dwelling rate filing, granting it a necessary overall 29.1% rate increase. The FAIR Plan’s rate filing generally aligned with the Sustainable Insurance Strategy (SIS) guidelines, which incorporate CDI-approved catastrophe modeling and account for the net cost of reinsurance.
This new dwelling policy rate will take effect on all new and renewal business on October 15, 2026.
Not every FAIR Plan customer will see their insurance bill go up by the same amount. Homeowners in high wildfire-risk areas will likely see larger increases, while those in lower-risk areas could see smaller increases or even lower premiums.
Policyholders may qualify for discounts by hardening their home.
FAIR Plan officials said state law requires the program to review and update home insurance rates at least every two years. They said rates must be high enough to cover claims and operating costs, and are adjusted based on wildfire risk, expenses and the growing number of homeowners relying on the FAIR Plan.
Littau urged homeowners to explore options before the new rates take effect.
“I think people should use the time between now and October to be proactive, and if there’s option to get off the California fair plan, they should be continuing to have conversations with their insurance agent or be calling around to find out if there’s a solution,” he said.
He said agents are already working to move people off the California FAIR Plan.
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Alice J. Roden started working for Trending Insurance News at the end of 2021. Alice grew up in Salt Lake City, UT. A writer with a vast insurance industry background Alice has help with several of the biggest insurance companies. Before joining Trending Insurance News, Alice briefly worked as a freelance journalist for several radio stations. She covers home, renters and other property insurance stories.