California Mandates Increased Home Insurance in Wildfire Zones

California has announced new regulations requiring home insurers to expand coverage in wildfire-prone areas, a measure designed to stabilize the state’s insurance market. Insurance Commissioner Ricardo Lara revealed that insurers must gradually increase their coverage to reach 85% of their market share in these high-risk zones. Major insurers like State Farm and Allstate had previously scaled back their presence due to wildfire-related risks.

To offset costs, insurers will be allowed to pass reinsurance expenses onto consumers—a move critics warn could raise premiums by up to 40%. The regulation is under review and expected to take effect soon. These measures align with another rule allowing insurers to factor climate change into pricing, addressing concerns that rising risks have driven companies away from California.

The ultimate goal is to reduce reliance on the FAIR Plan, a last-resort insurance program whose enrollment has surged to over 450,000 policies. Many Californians, including residents of wildfire-stricken areas like Paradise, struggle with skyrocketing premiums and limited coverage. While some welcome the changes, skepticism remains over their efficacy in addressing long-term challenges.