California’s FAIR Plan, an insurer of last resort, has seen a huge jump in its policies in recent years, sparking concerns among insurance trade groups and lawmakers. The plan now covers over 668,000 policies with an exposure value around $724 billion, according to Victoria Roach, the president of the FAIR Plan. These figures were shared during a California Assembly Insurance Committee meeting on January 28.
The FAIR Plan, designed to provide coverage where the traditional market falls short, has grown rapidly. By March 2025, it had about 573,700 policies in force—an increase of 23% since September 2024, 74% since September 2023, and a striking 139% since September 2021. Looking further back, data shows a 276% rise in policies between 2018 and 2024, with written premiums growing from $87 million to $1.4 billion over the same timeframe.
This growth reflects how many homeowners in California struggle to find insurance through regular carriers, pushing them toward the FAIR Plan. As of September 2023, the plan held roughly 330,000 residential policies, making up about 3 to 4% of the state’s homeowners insurance market.
Despite this surge, the FAIR Plan’s written premium increased only slightly from $1.93 billion to $1.96 billion in the last quarter of 2025. Growth has slowed partly because admitted insurers have reduced bulk nonrenewals, a key source of FAIR Plan business.
The FAIR Plan is responding by proposing a significant rate increase of about 35.8%, set to take effect in spring 2026 if approved. This would be the plan’s largest hike in at least seven years and marks the first time it would factor in wildfire catastrophe models and reinsurance costs into its rates.
Wildfires have been a constant challenge in California, and the Department of Insurance has introduced new rules using advanced wildfire catastrophe models as part of its Sustainable Insurance Strategy. In August 2025, it approved models from Verisk and Moody’s RMS, paving the way for insurers to update their rates with more accurate risk assessments.
Insurance companies outside the FAIR Plan say they still find it tough to compete because FAIR Plan policies are often cheaper. Mark Sektnan, vice president at the American Property Casualty Insurance Association, told lawmakers that FAIR Plan pricing has not been sufficient for years, and many people keep their FAIR Plan policies for decades because of the lower cost.
Sektnan expressed hope that the new wildfire models would slow the number of nonrenewals feeding into the FAIR Plan. But he stressed that reversing the FAIR Plan’s growth will require setting adequate rates. “Slowing down nonrenewals is a start, but depopulation depends on proper pricing,” he said.
As California’s housing market faces ongoing risks from wildfires and other natural disasters, the FAIR Plan continues to absorb a growing share of homeowners. The challenge remains balancing affordable coverage with financial sustainability, so that more Californians can find insurance in the admitted market, not just the last-resort option.