If your home is insured through the California FAIR Plan, your next renewal notice may be the most expensive one yet. In May 2026 the California Department of Insurance approved an average 29.1 percent increase for FAIR Plan dwelling policies. The plan had asked for 35.8 percent. The new rates apply to new policies and to renewals on or after October 15, 2026.
An average is only an average. Some homeowners in lower-risk urban areas may see smaller changes or even decreases, while homes in high wildfire-risk areas can see much larger jumps. This guide explains what the FAIR Plan is, why rates went up, and what you can do before and after your renewal.
What the FAIR Plan is, and what it is not
The California FAIR Plan is an insurer of last resort created by state law in 1968. It is funded by the insurance companies that write property coverage in California, not by taxpayers. When a homeowner cannot find coverage in the regular market, often because of wildfire risk, the FAIR Plan can provide a basic fire policy.
A FAIR Plan dwelling policy is narrower than a standard homeowners policy. It usually covers fire, lightning, internal explosion and smoke, with optional add-ons. It generally does not include personal liability, theft or water damage. That is why many owners pair it with a difference-in-conditions (DIC) policy that fills those gaps. If you have only the FAIR Plan and nothing else, you may be underinsured for everyday risks such as a guest injury or a burst pipe, which our guide to fire and water damage covers in more detail.
Why rates went up
Several forces pushed FAIR Plan costs higher at the same time:
Wildfire losses. The January 2025 Los Angeles fires produced billions of dollars in FAIR Plan claims, and the plan's exposure in high-risk areas has grown quickly as private insurers pulled back.
Reinsurance and financing. The plan buys reinsurance and, in December 2025, issued its first catastrophe bond. Those protections cost money, and the cost is reflected in premiums.
Growth in policies. More homeowners moved to the FAIR Plan after nonrenewals, which concentrated risk inside the plan.
Rate adequacy. In 2021 and 2023, regulators cut FAIR Plan requests of 40.8 and 48.8 percent to about 16 percent each. The 2026 decision reflects pressure to bring rates closer to expected losses.
The increase is weighted toward the wildfire portion of the premium, so the location of your home matters more than ever.
Who is affected
Reports put the number of FAIR Plan customers affected at more than 675,000 statewide. If your policy renews on or after October 15, 2026, the new rates apply at that renewal. Policies that renewed before that date keep the old rate until their next renewal. Commercial FAIR Plan policies follow separate filings, so business owners should check their own renewal paperwork and talk to their agent about commercial property options.
How to lower your FAIR Plan cost
1. Claim every mitigation discount
The FAIR Plan offers discounts for wildfire hardening, such as Class A roofs, ember-resistant vents, enclosed eaves and cleared defensible space, as well as community programs like Firewise USA. These discounts follow the state's Safer from Wildfires framework. Ask for a discount review and keep photos and receipts of the work you complete.
2. Shop the standard market again
Some insurers are returning to higher-risk areas under the Sustainable Insurance Strategy, which requires participating companies to write more policies in wildfire-distressed areas. A home that could not get standard coverage two years ago may qualify now. An independent agent can check several carriers in one pass, so it is worth asking for a fresh quote every renewal.
3. Review your coverage amount and deductible
Make sure your dwelling limit reflects current rebuilding costs, not the market value of the property. Underinsuring to save money can be costly after a total loss. At the same time, a higher deductible can reduce premium if you can comfortably cover it from savings.
4. Coordinate the DIC policy
If you carry a DIC policy, review it alongside the FAIR Plan renewal. The two policies should fit together without gaps or duplicate coverage. Liability protection matters here; consider whether an umbrella policy makes sense if you have significant assets.
5. Spread the payment
A larger annual premium can be easier to manage with installments. Ask about payment options before the due date so a missed payment does not lead to cancellation.
A simple way to estimate your new premium
Look at last year's declarations page and find the portion of the premium labeled for the dwelling. Multiply it by 1.29 to see roughly what a 29.1 percent average change would look like. Then compare that rough number with the figure on your renewal notice. If your notice is far above the estimate, your home may sit in a higher-risk rating territory, or your coverage amount may have been increased for inflation. If it is lower, mitigation credits or a lower-risk location may be working in your favor.
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Either way, the exercise gives you a clear set of questions to bring to your agent: which rating factors changed, which discounts are already applied, and whether any standard-market carrier would now accept the property.
Will the new Insurance Commissioner change this?
California elected Jane Kim as Insurance Commissioner in November 2026. She has proposed broader changes, including a public disaster insurer. However, the October 2026 FAIR Plan rate decision has already been approved and applies to renewals now. Any future changes would come through new filings, regulations or legislation.
Renters, landlords and condo owners
The FAIR Plan mainly affects owners of buildings, but tenants and investors feel it too. Landlords facing higher premiums may pass costs on through rent, and some lenders require proof of adequate coverage before refinancing. If you own a rental, review your landlord policy alongside any FAIR Plan coverage. Condo owners should know the difference between the association's master policy and their own unit coverage; a condo policy protects interior finishes, belongings and personal liability. Tenants still need their own renters insurance, because a landlord's FAIR Plan policy does not cover a tenant's belongings.
Frequently asked questions
When does the FAIR Plan increase take effect?
For policies written or renewing on or after October 15, 2026. Your renewal notice will show your new premium.
Is 29.1 percent what I will pay?
Not necessarily. It is a statewide average. Your change depends on location, wildfire risk, construction and coverage choices.
Does the FAIR Plan cover theft or liability?
Standard FAIR Plan dwelling policies generally do not. Many homeowners add a difference-in-conditions policy for those risks.
Can I leave the FAIR Plan mid-term?
Yes. If you find standard-market coverage, you can generally cancel and receive a pro-rated refund. Confirm the new policy is in force before cancelling.
What if I cannot afford the renewal?
Talk to an agent before the due date. Discounts, deductible changes, payment plans and a market check can all help. Do not let coverage lapse if you have a mortgage, because your lender may force-place a more expensive policy.
Does my auto or earthquake coverage change?
No. The FAIR Plan covers property fire risk only. Earthquake insurance and auto insurance are separate policies with separate rates.
This article is general information. Your policy documents and the FAIR Plan control your actual coverage and price.
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