# Government Actions to Address CA Insurance Crisis > Source: https://www.coveragecat.com/insurance-types/home/government-actions-to-address-ca-insurance-crisis > Description: The CA Insurance Commissioner and legislature have enacted various actions to fix the CA insurance crisis – from negotiating with insurers to allow necessary rate increases, to introducing regulations for mitigation discounts, and pausing non-renewals in state-declared emergency areas. > Updated: 2026-08-13 Across the Golden State, insurers such as State Farm, Allstate and Farmers have throttled new business, hiked rates or simply exited high-fire-risk ZIP codes. Homeowners struggle to find coverage even after spending tens of thousands on wildfire mitigation. California government officials and lawmakers aren't just watching [the crisis](https://www.coveragecat.com/blog/between-the-fault-and-the-flames-californias-home-insurance-market) unfold, they're rolling out a variety of changes that will affect homeowners, and insurers, across the state. "We've been non-renewed twice in three years despite no claims and extensive home hardening. Each new policy costs 30–40% more than the last. The FAIR Plan was quoting us over $8,000 for basic fire coverage. Something had to change at the regulatory level." — r/California ## Sustainable Insurance Strategy In September 2023, Insurance Commissioner Ricardo Lara unveiled a **Sustainable Insurance Strategy**—the most sweeping overhaul of California's insurance rules in over 30 years. ### **Key Elements of the New Framework** 1. **Allow the use of Catastrophe Modeling** * Insurers can now include future climate risk in their rate calculations * Previously, rates could only be based on historical loss data, which many insurers argued didn't reflect current risks 2. **Include Reinsurance Cost in rate formulation** * Companies can now include the cost of reinsurance (insurance for insurance companies) in their rate calculations * This addresses a major complaint from insurers that California's regulatory framework didn't allow them to account for a significant business expense 3. **Expedite Rate Filing Process** * Streamlined approval process for rate increases, addressing industry complaints about regulatory delays 4. **Protect consumers** * Insurers must increase their coverage in vulnerable areas to access these new rate-setting tools As of early 2026, six major insurers—including Farmers, Mercury, CSAA, USAA, Pacific Specialty, and California Casualty—have committed to staying and growing in California, covering one-third of the market and targeting 1.47 million homes in wildfire-distressed areas for new policies. The average rate increase request under the strategy is 6.9%. ## "Safer from Wildfires" Framework In addition to market reforms, Commissioner Lara implemented a "Safer from Wildfires" framework that: 1. Creates mandatory premium discounts for home hardening measures (e.g., ember-resistant vents, cleared defensible space). 2. Standardizes wildfire risk assessment tools 3. Provides transparency on wildfire risk scores, including requiring an appeals process. ## Moratorium on Non-Renewals One of the most immediate relief measures came in the form of one-year moratoriums on non-renewals following wildfire disasters: The Department of Insurance officially imposes a one-year **moratorium on non-renewals** in affected ZIP codes: * **2.4 million** policies protected since 2019, with recent extensions following the 2025 Los Angeles wildfires and expanding protections to businesses, homeowners associations, affordable housing, senior living facilities, and nonprofits starting January 1, 2026 This measure has received mixed reactions on Reddit: "The moratorium bought us time, but it's just a band-aid. Our renewal is protected for this year, but what happens next year when the protection expires? We're still in the same high-risk area." - r/Insurance "At least the moratorium gives us time to make home improvements or find alternative coverage instead of being suddenly dropped." - r/homeowners ## Legislative Actions ### Senate Bill 824 (2018) The California Legislature has also taken steps to address the crisis through Senate Bill 824 (2018), which: * Prohibits insurers from canceling or refusing to renew policies for one year after a wildfire emergency declaration * Applies to homes that weren't completely destroyed * Requires insurers to report detailed wildfire risk data to the state ([(San Francisco Chronicle, "California FAIR Plan is running out of money; nearly all homeowners to help bail it out")](https://www.sfchronicle.com/california-wildfires/article/insurance-fair-plan-20040933.php)) ### Senate Bill 263 (2023) In October 2023, Governor Newsom signed Senate Bill 263, which: * Creates a statewide home hardening initiative * Establishes wildfire mitigation standards * Provides $1 billion for home hardening grants focusing on low-income households * Requires insurers to provide and honor wildfire risk reduction premium discounts ### Assembly Bill 1241 (2024) Another key legislative action, AB 1241: * Requires insurers to provide homeowners with their wildfire risk scores * Mandates disclosure of the specific factors affecting those scores * Creates an appeals process for disputing inaccurate scores This addresses a common frustration expressed by Californians: "We were told our home was 'high risk' but given zero information about why or what we could do to mitigate it. Finding out later that they were using outdated satellite imagery that showed trees we'd removed years ago was infuriating." - r/Insurance ### 2025-2026 Legislative Reforms The "Eliminate The List" Act (SB 495), authored by state Sen. Ben Allen, eliminates the requirement for wildfire survivors to submit detailed lists of destroyed items to receive reimbursement. The California Safe Homes Grant Program (AB 888) establishes a program to help cover homeowner and community costs for fire-resistant improvements, while the Insurance and Wildfire Safety Act (AB 1) requires California's insurance regulators to regularly review and update regulations promoting wildfire safety and insurer discounts for mitigation. The FAIR Plan Stabilization Act (AB 226) permits the FAIR Plan to access bonds if at risk of bankruptcy, jointly authored by Assemblymembers Lisa Calderon and David Alvarez. AB 234 places two lawmakers or their designees on the FAIR Plan governing board to increase transparency, addressing longstanding concerns about the lack of public visibility into the board's composition and deliberations. The California Wildfire Public Model Act (SB 429) funds the nation's first publicly available wildfire loss catastrophe model, similar to Florida's hurricane model from over a decade ago. ## California FAIR Plan Expansion & Bailout Originally a fire-only "insurer of last resort," the FAIR Plan has also been expanded significantly by the state to provide more comprehensive coverage: * Coverage limits increased to $3 million for residential policyholders and $20 million for commercial policies per building, with a total $100 million maximum limit per location * Required the FAIR Plan to offer a comprehensive homeowners policy beyond just fire coverage. Customers can purchase extended perils, as well as vandalism & malicious mischief coverage. * Streamlined the application process In February 2026, Commissioner Lara and Assembly Insurance Committee Chair Lisa Calderon announced the "Make It FAIR Act" (AB 1680) to overhaul the FAIR Plan, strengthening claims handling, expanding coverage options, and improving transparency. The FAIR Plan issued a $1 billion assessment in February 2025 to maintain its ability to pay ongoing claims following the Eaton and Palisades fires. ## "Insurance Market Action Plan" & Strike Team In March 2024, Governor Newsom and Commissioner Lara announced the creation of an insurance "Rapid Response Strike Team" to: * Implement the regulatory reforms more quickly * Attract insurers back to the California market * Monitor compliance with new regulations * Address consumer complaints about availability ## Effectiveness & Outlook As of early 2026, the payment of insurance claims from the Los Angeles wildfires is the fastest on record, with $22.4 billion distributed since January 2025, and 94 percent of 42,121 policyholder claims filed have been fully or partially paid. Residential and commercial FAIR Plan policyholders can obtain discounts of up to 20 percent on the wildfire portion of their premium for home hardening. Critics warn that genuine availability in the highest-risk zones remains elusive, and consumer groups have raised concerns about flexibility provisions that allow insurers to opt out of coverage commitments by claiming hardship. For homeowners navigating these regulatory changes while seeking coverage, [expert solutions and practical strategies](https://www.coveragecat.com/blog/expert-solutions-for-california-homeowners-facing-the-insurance-crisis) can help bridge the gap between policy reform and personal protection.