One in seven homeowners policies written in California last year went through the FAIR Plan or the excess and surplus (E&S) lines market. The Insurance Information Institute (Triple-I), an industry trade group for US property and casualty insurers, published those figures, which capture where placement has already moved.
The Issues Brief, titled State of the State: California Homeowners Insurance, found California's E&S homeowners market share rose from an average of 1.1% between 2016 and 2020 to 7.3% in 2025. The FAIR Plan's policy count grew 157% since 2022, with total exposure reaching $768 billion as of June.
Those two channels combined, 15% of the California homeowners market in 2025, now represent a permanent feature of placement. A California personal lines broker who never placed an E&S policy or navigated a FAIR Plan enrollment could function without gaps a decade ago. That is no longer true.
California homeowners insurers averaged a combined ratio of 122.6 between 2016 and 2025, according to the Triple-I report citing AM Best data. Insurers paid out more than $1 in claims and expenses for every dollar collected across that period. The 2025 Los Angeles wildfires alone added more than $22 billion in insured claims.
The regulatory structure has added to the pressure. California's median rate-filing approval time is 225 days, compared with a national median of 35 days. Carriers unable to obtain timely rate approvals have pulled back, and the FAIR Plan and E&S market have absorbed what the admitted market has ceded.
Commissioner Ricardo Lara's sustainable insurance strategy (SIS) now permits carriers to use forward-looking catastrophe models and reinsurance costs in rate filings. Carriers that file under the SIS commit to writing at least 85% of their statewide market share in wildfire-distressed areas. By mid-2026, six of California's 10 largest home insurance groups had committed to the SIS framework, according to California Department of Insurance (CDI) data.
The Triple-I report acknowledges the progress but argues further reform is needed.
The FAIR Plan's 29.1% average rate increase takes effect October 15, according to CDI. The plan initially sought 35.8%. State Farm has re-opened limited new business in CDI-approved wildfire-distressed ZIP codes under its SIS settlement. Broader statewide availability from major carriers is still returning.
Surplus lines homeowners policies in California surpassed 300,000 in 2025, figures from the Surplus Line Association of California (SLACAL) show, with urban homes in major metropolitan areas accounting for roughly 90% of those placements. That shift has carried the E&S footprint well beyond wildfire-corridor properties and into standard metropolitan neighborhoods across the state.
Triple-I's report frames the California situation as a structural problem requiring continued regulatory reform. Triple-I represents insurer members and its advocacy aligns with their commercial interests. The underlying data is consistent with figures published by CDI, the FAIR Plan, and the SLACAL.
The reform trajectory has not yet reversed the E&S share or the FAIR Plan's scale. New FAIR Plan business is down 25% in 2026, according to CDI data, which regulators describe as an early sign SIS reforms are working.
