State Farm just settled its California rate case at a 17% increase for homeowners — down from the 30% it originally requested, but still a significant jump. Meanwhile, the FAIR Plan — California's insurer of last resort — is seeking a 36% rate increase after reporting $4 billion in losses from the January 2025 wildfires.
For owners of high-value homes in fire-prone areas, these aren't abstract numbers. Many have already been non-renewed by their primary carrier and pushed onto the FAIR Plan, which primarily provides fire coverage — not the comprehensive protection of a standard homeowners policy. It doesn't include liability, theft, or water damage unrelated to fire. To fill those gaps, you need a separate Difference in Conditions policy layered on top — which adds cost and complexity.
The math adds up fast. A $5 million home in the hills or canyons could face combined premiums north of $30,000 to $50,000 a year between the FAIR Plan, a DIC policy, and any excess coverage. That's before the proposed 36% increase takes effect.
There are a few legislative efforts in motion. Commissioner Lara introduced the "Make It FAIR Act," which would require the FAIR Plan to offer comprehensive homeowners coverage — including liability and water damage — rather than the bare-bones fire policy it writes today. A separate bill would create the first statewide framework for handling wildfire smoke damage claims, which is a growing issue for homes that don't burn but still sustain six-figure remediation costs from smoke infiltration.
Whether those bills pass and how quickly carriers re-enter the California market are open questions. In the meantime, the practical reality is that insuring a high-value California home requires more attention, more carriers, and more premium than it did even two years ago. If your coverage hasn't been reviewed since your last renewal, it's worth checking whether what you're paying for still matches what you actually need.
For educational purposes only. Not tax, legal, or investment advice.