Homeowners insurance in California

The home insurance market in California

Californians paid $17.73 billion in homeowners premiums in 2025, according to NAIC market share data. These are the 10 largest insurance groups by 2025 direct premiums written:

The names are familiar, but the table hides how hard it has been to buy a new policy. State Farm General stopped accepting new homeowners applications on May 27, 2023, and in March 2024 announced nonrenewals of about 30,000 homeowners and other property policies. The Department of Insurance (CDI) says Allstate stopped writing new residential policies in 2022. Farmers kept writing but capped new homeowners business until November 21, 2025. CDI data cited by the California Earthquake Authority show homeowners policies statewide fell from 6,320,647 in 2024 to 6,052,334 in 2025.

The tide started to turn under the Sustainable Insurance Strategy described below. By September 18, 2026, CDI said 12 insurance groups had filed or won approval under it, including an Allstate filing submitted August 31, 2026. In September 2026 State Farm filed guidelines to accept new applications for homes with an IBHS Wildfire Prepared Home designation. On September 18, 2026, CDI said neither company was open for new business yet. The backstory is in california's home insurance crisis and California's Sustainable Insurance Strategy.

What drives home insurance costs in California

Wildfire drives the market. Aon puts insured losses from the January 2025 Palisades and Eaton fires at $41 billion, the costliest wildfires on record worldwide. CDI's claims tracker showed 41,727 claims filed and $25.2 billion paid as of July 6, 2026.

Regulation shapes the price. Under Proposition 103 (1988), rates must be approved before use, and a personal-lines increase above 7% goes to a public hearing if a consumer timely requests one. For about 30 years rates had to rest on historical wildfire losses, with no allowance for reinsurance costs. Rules effective December 2024 and January 2025 now let insurers use forward-looking catastrophe models and a standard net cost of reinsurance, but only if they commit to writing in wildfire-distressed areas: at least 85% of their statewide market share, or a 5% increase in exposures there within two years (10 CCR §2644.4.8). Rate cases still take time. State Farm received an emergency interim 17% homeowners increase effective June 1, 2025, and a March 2026 settlement kept it at 17%.

NAIC's average HO-3 premium in California was $1,655 in 2023, below the national $1,737, even as the number of insurers willing to write new policies shrank.

Deductibles and coverage rules to know

California has no hurricane deductible law. The rules that matter are about wildfire and nonrenewal.

• Nonrenewal notice: at least 75 days before expiration (Ins. Code §678(c)(1)), with a referral to CDI's California Home Insurance Finder. A late notice keeps the policy in force for 75 days from the date it is sent.
• Moratoriums: after a governor's emergency declaration, insurers may not nonrenew homes in ZIP codes in or next to the fire perimeter for one year solely because of the wildfire (Ins. Code §675.1). CDI says moratoriums protected more than 1.2 million homeowners in 2025.
• Total losses: after a disaster total loss, the insurer must offer at least two annual renewals, and no less than 24 months of coverage.
• Wildfire risk scores: insurers that rate on wildfire risk must disclose your score at least 45 days before renewal and 75 days before a nonrenewal, and decide an appeal within 30 days (10 CCR §2644.9).
• Contents after a wildfire: since January 1, 2026, a wildfire total loss gets 60% of the personal property limit, up to $350,000, without an itemized inventory (SB 495).

SB 876, signed September 28, 2026, adds a mandatory offer of extended replacement cost and living-expense coverage when a policy is written; it takes effect in stages from January 1, 2027.

Flood and other gaps

Homeowners policies exclude earthquake. The California Earthquake Authority sells it only through participating insurers, with deductibles of 5% to 25% of the dwelling limit; 5% and 10% are unavailable above $1 million of dwelling coverage and on unretrofitted pre-1980 raised-foundation frame homes. Only 15.24% of homeowners policies carried earthquake coverage in 2025. See The California Earthquake Authority explained.

Flood is excluded too. FEMA data show about 169,500 NFIP policies in force in California as of September 30, 2026 (our sum of FEMA's community figures).

If you can't find coverage

The California FAIR Plan sells a basic fire policy when coverage is unavailable "through no fault of the property owner," with dwelling limits up to $3 million. A broker can pair it with a difference in conditions policy for the coverages it lacks, such as theft, water damage and liability. The FAIR Plan had 696,562 policies in force in June 2026, up 157% since September 2022, though CDI says growth slowed to about 16,000 residential policies in the first quarter of 2026.

After the Los Angeles fires, the FAIR Plan assessed member insurers $1 billion (February 11, 2025), and insurers could seek approval to recoup half through a temporary policyholder fee. AB 226 lets the plan use catastrophe bonds and credit lines from January 1, 2026, and AB 1680, the Make It FAIR Act, was signed in September 2026. More in FAIR plans explained: the insurer of last resort for homes.

Claims rules and deadlines

Under the Fair Claims Settlement Practices Regulations, an insurer must acknowledge your claim and begin investigating within 15 calendar days, accept or deny within 40 days after proof of claim (with written updates every 30 days if it needs more time), and pay within 30 days of accepting (10 CCR §§2695.5, 2695.7). Insurers must warn an unrepresented claimant of a deadline to sue at least 60 days before it expires.

The deadline to sue is 12 months from inception of the loss, or 24 months when the loss stems from a declared state of emergency (Ins. Code §2071). After a declared disaster, either side may request appraisal, but neither can be forced into it.

CDI's mediation program covers residential fire and earthquake claims after a declared emergency when the claim exceeds $7,500 and the dispute exceeds $2,000. You start with a CDI complaint; the insurer pays the mediator. See state mediation programs for homeowners claims.

Discounts and mitigation programs

The Safer from Wildfires regulation requires insurers that price wildfire risk to give discounts for a Class A roof, ember-resistant vents, enclosed eaves, multipane windows, a 5-foot noncombustible zone, 6 inches of noncombustible clearance at the base of walls, defensible space, and Firewise USA or Fire Risk Reduction Community status. The rule sets no percentage, so compare offers.

The CEA cuts earthquake premiums by up to 25% for retrofitted older homes, and Earthquake Brace + Bolt grants pay up to $3,000. The state's wildfire retrofit pilot covers full cost, upwards of $40,000, for qualifying households in six demonstration communities, according to a June 2026 Cal OES report. See home hardening for wildfire and insurance discounts.

Where to get help

The California Department of Insurance Consumer Hotline is 800-927-4357 (TTY 800-482-4833). File complaints online at CDI's consumer portal; the department's Los Angeles office is at 300 South Spring Street, 14th Floor, Los Angeles, CA 90013. If you received a nonrenewal, start with your home insurance was nonrenewed: what to do now and the nonrenewal action plan; how to file a complaint with your state insurance department covers the complaint process. Neighboring state guides: Oregon and Nevada.