California, October 10, 2025
News Summary
The California FAIR Plan has requested a substantial 35.8% rate increase to recover from $4 billion in wildfire losses from January 2025. This move follows previous rate hikes and aims to ensure the plan’s financial stability amidst rising claims and lawsuits regarding smoke damage. Homeowners are encouraged to implement mitigation strategies for potential discounts. Governor Newsom has signed bills to enhance the FAIR Plan’s operations, yet consumer advocacy groups are demanding action on unresolved claims before any rate increase is approved.
California — The California FAIR Plan has requested an average insurance rate increase of 35.8%. This increase is prompted by approximately $4 billion in losses due to wildfires that occurred in January 2025. If approved, this rate hike would mark the largest increase since 2019, which saw an average rise of 20.3%.
The proposed rate increase follows two prior annual hikes of 16% in both 2021 and 2023, though the 2023 request originally sought an increase of 48.8% before being adjusted down by the insurance commissioner. The FAIR Plan is designed specifically for homeowners who are unable to find coverage through traditional private insurers, and its role has become increasingly crucial as many private companies withdraw from the market.
Leaders of the FAIR Plan have indicated that the requested rate increases are necessary to maintain financial viability in the wake of substantial assessments from member carriers, totaling $1 billion to cover claims. The average 35.8% rate hike is expected to vary based on individual property risks and geographical locations, with homeowners in areas more susceptible to wildfires likely facing steeper increases.
Homeowners enrolled in the FAIR Plan can mitigate their costs by implementing wildfire risk mitigation strategies on their properties, which can yield discounts of up to 15% on their premiums. Meanwhile, California Governor Gavin Newsom has recently signed five bills aimed at improving the FAIR Plan’s operations, which include new financing methods and enhanced oversight protocols.
However, the FAIR Plan is currently facing challenges arising from claims related to smoke damage stemming from January’s wildfires. Several lawsuits have been filed against the Plan, alleging mismanagement of smoke damage claims. A recent ruling by a Superior Court judge determined that the FAIR Plan’s smoke damage policy was in violation of state law, following numerous complaints from homeowners who cite inadequate testing and remediation processes.
As the California Department of Insurance reviews the proposed rate increase, the adjustments will only take effect if approved. Consumer advocacy groups are actively campaigning for protective measures to prevent the proposed rate hike from being implemented until the unresolved issues surrounding smoke damage claims are addressed.
In summary, the California FAIR Plan’s proposed insurance rate increase reflects a critical response to recent catastrophic wildfire losses but has ignited ongoing debates about the adequacy and fairness of insurance provisions in the state.
FAQ
What is the requested rate increase for the California FAIR Plan?
The California FAIR Plan has requested an average insurance rate increase of 35.8%.
What caused the rate increase request?
This proposed increase comes after the plan incurred approximately $4 billion in losses due to wildfires in January 2025.
When was the last time the FAIR Plan had a rate increase?
If approved, the rate hike would be the largest since 2019, which saw an average increase of 20.3%.
What were the previous rate increases?
In 2021 and 2023, rate increases were both 16%, though the 2023 request for a 48.8% increase was reduced by the insurance commissioner.
What is the purpose of the FAIR Plan?
The FAIR Plan is designed to provide insurance for homeowners who cannot find coverage elsewhere and has increasingly become the only option for many as private insurers withdraw from the market.
Are there discounts available for homeowners?
Homeowners can receive discounts of up to 15% on their premiums if they implement wildfire risk mitigation strategies on their properties.
What legislative changes have been made to the FAIR Plan recently?
Governor Gavin Newsom recently signed five bills aimed at improving the FAIR Plan, including new financing methods and increased oversight.
What issues is the FAIR Plan currently facing?
Challenges with smoke damage claims from the January wildfires have led to lawsuits against the FAIR Plan for alleged mishandling of claims.
What is the outcome of the lawsuits against the FAIR Plan?
A Superior Court judge ruled that the FAIR Plan’s smoke damage policy violated state law after complaints from homeowners regarding inadequate testing and remediation.
Who is reviewing the rate increase request?
The California Department of Insurance is reviewing the rate increase request, which must be approved before implementation.
What are consumer advocacy groups demanding?
Consumer advocacy groups are pushing for protections against the proposed rate hike until the ongoing issues with smoke damage claims are resolved.
Key Features of the California FAIR Plan Rate Hike
| Feature | Details |
|---|---|
| Requested Rate Increase | 35.8% |
| Losses Due to Wildfires | $4 billion in January 2025 |
| Previous Largest Rate Increase | 20.3% in 2019 |
| Previous Rate Increases | 16% in 2021 and 2023 |
| Discounts for Homeowners | Up to 15% for wildfire risk mitigation strategies |
| Recent Legislative Changes | Five bills signed by Governor Gavin Newsom |
| Challenges Faced | Legal issues regarding smoke damage claims |
Deeper Dive: News & Info About This Topic
- Los Angeles Times: California’s Home Insurer of Last Resort Seeks 36% Rate Hike Following January Fires
- San Francisco Chronicle: FAIR Plan Insurance Rate Increase
- Coastside News: FAIR Plan Rate Increase Would Impact Coastside Homes
- Action News Now: New California Law Aims to Stabilize Insurance for People Who Can’t Get Private Coverage
- Google Search: California FAIR Plan insurance rate hike
Author: Anaheim Staff Writer
Anaheim Staff Writer The Anaheim Staff Writer represents the experienced team at HEREAnaheim.com, your go-to source for actionable local news and information in Anaheim, Orange County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as major conventions at the Anaheim Convention Center, including NAMM and VidCon, exciting games at Angel Stadium and Honda Center, and developments at Disneyland Resort Our coverage extends to key organizations like the Anaheim Chamber of Commerce and Visit Anaheim, plus leading businesses in hospitality, entertainment, and innovation that power the local economy As part of the broader HERE network, including HERECostaMesa.com, HEREHuntingtonBeach.com, HERESantaAna.com, and HERELosAngeles.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
