Homeowners in California are facing steep increases in insurance premiums, particularly in areas that are most susceptible to wildfires.
A recent report from Stanford University’s Climate and Energy Policy Program highlights a significant jump—homeowners are now paying an average of 84% more each year to insure their properties compared to 2020.
Between 2020 and 2026, average monthly premiums have surged by approximately $90, according to the findings.
The report also noted that the average deductible climbed from $1,813 to $2,553 during this time, reflecting the economic challenges homeowners are experiencing and the competitive market for insurance as premiums continue to rise.
It’s not surprising that the most substantial increases are found in regions with heightened wildfire risk.
One striking map illustrates the situation, showing a 100% expansion of areas devastated by fire, encompassing parts of the Sierra Nevada mountains, foothill communities, and extensive regions in Los Angeles County affected by the wildfires of 2025.
In Mariposa County, premiums soared by nearly 150%. A community in Northern California, Loch Lomond, saw an astonishing rise in insurance costs—over 200%. Similarly, Riverside County’s Pine Cove in Southern California recorded a premium increase of more than 200%, while Mount Baldy faced a staggering hike of 350%.
Other parts of the state haven’t been spared, with most regions experiencing premium hikes between 80% and 100% since 2020.
This study was conducted by gathering data from mortgage lenders to analyze how premiums have shifted under state FAIR plans and with major insurance providers in California.
The FAIR program offers essential fire coverage for Californians with high-risk properties that traditional insurance companies won’t cover.
The study revealed that escalating losses from wildfires, combined with regulatory pricing challenges, are prompting insurers to cut back on the number of policies available in risky areas.
Research indicates that insurance companies are either choosing not to renew existing customers, halting new business, or doing both. Notably, major insurers like Farmers, Allstate, and State Farm have significantly reduced their policies in the last six years.
Consequently, more homeowners in fire-prone areas are turning to state insurance options for coverage.
While the average policy costs have gradually climbed over the past six years, the volatility in costs associated with the state FAIR plans has been much more pronounced.
The report shows that the FAIR program saw a dramatic 353% increase in policy costs from 2018 to 2023, followed by a slight decline after that period.
Examining individual cases, residents in Palisades have seen their average monthly premium for FAIR plans rise from $6,500 in 2025 to an expected $9,000 in 2026. In Malibu, the increase is from $8,000 to $11,000.
In another fire-prone neighborhood of Los Angeles, homeowners in Altadena are projected to pay $4,500 this year, up from $3,300 last year.
In summary, the report emphasizes that both average monthly premiums and deductibles are on the rise, leaving homeowners grappling with the challenge of securing affordable insurance—especially in high-risk regions.
The California Post has reached out to the Department of Insurance for additional insights.
