Following the Eaton and Palisades fires, California’s Fair Access to Insurance Requirements (FAIR) Plan—which writes policies for the state’s residual market, sometimes called the ‘insurer of last resort’—will assess $1 billion in emergency fees on member insurers.
From the approximately 5,000 claims the California FAIR Plan received in the month following the fires, resulting in an estimated $4 billion in total losses, a quarter of those losses will be passed onto member insurers.
This marks California’s FAIR Plan’s first emergency assessment in more than 30 years, according to a bulletin from the state’s insurance commissioner.
Of that $1 billion, half of those fees can be passed onto a broad range of policyholders.
According to a new analysis, titled California’s Homeowners Insurance Market is a National Bellwether, by the Harvard Joint Center for Housing Studies, the private residential insurance market has been showing signs of instability for years before the fires in January.
Drawing from data from a recent Federal Insurance Office (FIO) report, the average homeowners insurance premium in the private market increased by 8.7% above inflation between 2018 and 2022, nationwide.
During that same period, the zip codes in Altadena and Pacific Palisades—which experienced the highest amount of structures damaged in the fires—saw higher nonrenewal rates, compared to the California-wide and nationwide average.
These types of signs—and the overall devastation seen from the wildfires—should incentivize other high-risk regions to build more resilient, the Harvard analysis said.
“In California and other states, insurance regulators require insurance premium discounts for specific home mitigation actions,” the report stated. “Innovative product solutions such as climate endorsements in residential insurance policies can further incentivize incorporation of climate-resilient features into homes rebuilt with insurance claims payouts.”
In 2022, Altadena’s and Pacific Palisades’ nonrenewal rates reached 1.7% and 1.8%, respectively, compared to the California average of 1.3% and the nationwide average of 1.2%.
At the same time, the average annual homeowners insurance premiums in Pacific Palisades rose 33% above inflation, from $5,025 to $6,689. Altadena’s average premium rose 26% above inflation, from $1,485 to $1,873.
Looking at data from the past decade, these high premiums and nonrenewal rates are apparent in the number of residential policies in California’s FAIR Plan.
Since 2015, they have quadrupled—reaching a historic high of more than half a million in March 2025.
From 2021 to 2024, the number of FAIR Plan policies in Pacific Palisades and Altadena more than doubled, from 1,184 to 2,388.
According to Harvard’s report, California’s insurance commissioner also approved a 17% rate increase for homeowners insurance policies from State Farm, the state’s largest writer of homeowners insurance.
