Can I Still Get Fire Insurance in a High Risk Area?

Can I Still Get Fire Insurance in a High Risk Area?

  • The Kohl Team
  • 10/25/23

You may have heard the news that both State Farm and Allstate are no longer issuing new fire insurance policies in the state of California. With over 50,000 homes and structures destroyed since 2017, the insurance giants are unable to adjust rates quickly enough to keep up with what some analysts are referring to as “climate change-fueled disasters” and the cost of rebuilding. 

Proposition 103, which was passed by California voters in 1988, limits the amount insurance companies can increase rates and requires approval from the state’s Insurance Commission before doing so. The hope is that because the demand for insurance is so high, and now the supply is limited, State Farm and Allstate would return to the marketplace once the rates adjust.

For now, homeowners have become reliant on the California FAIR Plan with wrap around, supplemental insurance. Originally designed to protect properties in high-risk areas, the FAIR plan offers coverage when traditional insurers will not. The FAIR Plan is described as follows on their site: “a syndicated fire insurance pool comprised of all insurers licensed to conduct property/casualty business in California. The FAIR Plan was established by statute (California Insurance Code sections 10091 et seq.) in August, 1968 as an insurance placement facility.” 

If you are purchasing a home, we suggest contacting an insurance agent today to establish a timeline for purchasing a policy as the FAIR Plan office has had an influx of requests due to the needs of California property owners who are in need of fire insurance. Feel free to contact for a list of trusted insurance brokers in the area who can answer specific questions about plans and coverage.


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