"This proposed rate hike would be the largest increase since 2019, when rates rose by an average of 20.3%. In 2021 and 2023, rates went up by 16% in each year, although 2023's hike was cut down by California insurance commissioner Ricardo Lara, as the FAIR Plan originally sought a 48.8% rate increase. By statute, FAIR Plan rates must be sufficient to pay anticipated claims and expenses, FAIR Plan spokesperson Hilary McLean said in a statement."
"The request came after the FAIR plan incurred billions of dollars in losses due to the wildfires that plagued the state in January 2025. In total, estimated losses from the January wildfires came in near $4 billion, which is prompting the FAIR Plan to assess an additional $1 billion to its member carriers that would enable it to pay all of the claims."
The FAIR Plan requested its largest proposed rate hike since 2019 after incurring nearly $4 billion in losses from January 2025 wildfires. The plan seeks to assess an additional $1 billion to member carriers to enable payment of all claims. By statute, rates must cover anticipated claims and expenses, and the FAIR Plan is coordinating with the California Department of Insurance to align rates with current risk, expenses and growth. If approved, new rates would apply in April 2026, averaging 35.8% but varying by property and wildfire risk, with up to 15% mitigation discounts. The FAIR Plan faces lawsuits alleging inadequate smoke remediation and a judge ruled its smoke damage policy violated state laws.
Read at www.housingwire.com
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