California is now the largest fire insurance market in the country - and it got there through crisis.
Insurance Business America's new special report shows California's fire insurance premiums grew 126.5% over five years, hitting $3.37 billion in 2024 and overtaking Texas for the top spot. The twist: its 2024 loss ratio of just 28.5% is among the lowest of any major state - a sign of aggressive rate action running well ahead of paid losses.
That gap won't last. The report notes January 2025's LA wildfires will hit statutory data hard, echoing what Hawaii just went through: a loss ratio that spiked to 359.4% in 2023 after the Maui wildfires, then normalized to 52.5% in 2024 as costs settled.
Meanwhile, major carriers including The Hartford, State Farm, AIG, and Allstate have stopped writing new homeowners’ policies in California, pushing volume into surplus lines and the FAIR Plan, now covering over 463,000 homes with $450 billion in exposure. A December 2024 regulatory reform finally allows reinsurance costs into rate-setting - a shift that may start drawing capacity back.
