For the past few years, being an insurance agent in California has meant having a lot of hard conversations.
I have had to tell longtime homeowners their carrier was not renewing them after decades of loyal payments. I have had to explain why a family that had never filed a claim was suddenly being pushed toward the California FAIR Plan — a more expensive, limited-coverage option designed to be a last resort, not the only choice for thousands of homeowners.
Those are not abstract policy debates to me. They are kitchen-table conversations with real families trying to protect the biggest investment of their lives.
The good news is that, after years of strain, California’s insurance market is finally starting to turn a corner. The risk now is that California changes course before these reforms have a chance to fully work.
California did not arrive at this crisis overnight. For too long, state rules did not allow insurance rates to keep pace with the real risks facing our communities — especially wildfire risk. As fires became more destructive, rebuilding costs climbed, climate conditions changed, and the cost of reinsurance rose. Yet insurers were forced to rely on outdated tools that looked backward instead of forward.
That may sound technical, but the impact was simple: carriers pulled back. Some stopped writing new policies. Others non-renewed customers in higher-risk areas. More homeowners were pushed into the FAIR Plan, which offers less comprehensive coverage and is often more expensive than traditional insurance.
In response, the California Department of Insurance introduced the Sustainable Insurance Strategy. The strategy modernizes California’s insurance rules by allowing insurers to use forward-looking catastrophe models and account for real-world costs like reinsurance. But there is an important catch: insurers that use these tools must also commit to writing more policies in wildfire-prone areas.
That is not a blank check. It is a tradeoff. If insurers want the ability to price risk more accurately, they must help restore access to coverage in the communities that need it most.
And we are already seeing results.
Major residential carriers including Mercury, CSAA, Farmers, Travelers, USAA, AAA and others have filed under the Sustainable Insurance Strategy or otherwise committed to expand their presence in California. Zurich, one of the world’s largest commercial insurers, has also submitted a filing to expand commercial property coverage in distressed and wildfire-prone regions. Insurers are moving from retreat, back toward growth.
Perhaps the clearest sign of progress is the FAIR Plan. For years, the FAIR Plan was swelling as private carriers pulled back and residential customers were forced into the FAIR Plan. But newly released data showed the FAIR Plan added only about 16,000 residential policies in the first quarter of 2026 — a sharp slowdown prior quarters, when it was adding double to triple that number of policies.
The FAIR Plan was never supposed to become California’s default insurance option. It was created as a backstop for homeowners who could not find coverage elsewhere. The goal should be to move more families back into the traditional market, where they have more complete coverage, more competition and more choices.
The responsible path is to keep implementing the reforms, keep pushing carriers to expand coverage, keep rewarding wildfire mitigation, and keep moving homeowners out of the FAIR Plan and back into the traditional market.
In plain English: the market is not fixed, but it is healing. Fewer homeowners are being forced into the FAIR Plan, and more private-market options are beginning to return.
California’s insurance market is finally turning a corner. Let’s keep moving in a direction that is showing real results.
Tracey Rivera is a San Diego-based insurance agent serving Southern California families.
