California insurers plan to expand wildfire coverage, but homeowners may still face higher costs

California homeowners in wildfire-distressed areas may see more insurance options, but the changes announced by state regulators will not immediately produce a private policy for every address.

The California Department of Insurance said July 23 that 11 homeowners insurance groups had committed to stay and grow in the state under its Sustainable Insurance Strategy. The announcement included a pending Liberty Mutual filing, a future USAA expansion, an approved market entry by MS Transverse and a planned expansion by PURE.

For residents, the key question is not simply whether a company has announced growth. It is whether that insurer is currently writing the needed coverage for a particular address, at what price and with what exclusions.

What changed in the California insurance market

Liberty Mutual requested the department’s approval to expand coverage in wildfire-distressed areas through independent agents and brokers without an additional rate increase for policyholders. The request remains subject to department review and is not an approved expansion.

USAA plans to broaden access to homeowners insurance for more military members and their families across California beginning in January 2027. The plan is future access, not a guarantee that every military member, family or property will qualify. It is also separate from a previously approved 6.9% overall USAA rate increase; that increase was not announced as a new July 23 rate action.

MS Transverse Insurance Group, a new entrant to California’s homeowners market, received department approval effective July 15, 2026. The company previously had a small presence in California specialty markets.

PURE said it plans to expand its California homeowners business and identify high-value homes, including properties currently insured through the non-admitted market or the California FAIR Plan.

The department identified Farmers, Mercury, Auto Club of Southern California, CSAA, USAA, Liberty Mutual, Travelers, Pacific Specialty, California Casualty, Horace Mann and MS Transverse as the 11 insurance groups committing to stay and grow in California.

That figure should not be confused with the department’s separate market snapshot, which lists six homeowners insurance groups as expanding under the Sustainable Insurance Strategy. The announcement’s 11-group figure describes commitments to stay and grow, while the snapshot’s six-group figure describes groups counted as expanding in that data display.

More choices do not guarantee a quote today

A company commitment, pending filing or future effective date does not mean a homeowner can immediately buy coverage. Availability depends on the carrier’s current underwriting rules, the property’s location and characteristics, wildfire risk, coverage limits and the date a company actually begins writing the relevant policy.

California uses a prior-approval process for many property-insurance rate filings. A proposed rate or related filing remains subject to review before it can take effect. An approved market entry likewise does not guarantee that a carrier will accept every property or offer a price a homeowner can afford.

Homeowners should ask an agent whether a quote is for admitted-market coverage, non-admitted coverage, a supplemental policy or the FAIR Plan. They should also ask when the policy would take effect, what exclusions apply and whether it includes replacement costs, additional living expenses and wildfire-related losses.

Why premiums may remain high

California’s homeowners market remains under pressure even as insurers announce plans to expand. The department’s market snapshot lists 8,300,730 homeowners policies, excluding FAIR Plan policies, and 662 ZIP Codes in distressed areas.

The snapshot also lists 668,609 FAIR Plan homeowner and commercial policies in December. It reports an average California homeowners premium of $1,571, compared with $1,512 nationally.

The FAIR Plan is California’s insurer of last resort. Its policy count, liability exposure, premiums and assessments are different measures of the market’s financial strain. The Los Angeles Times reported that total FAIR Plan exposure reached $750 billion as of March 2026. That figure reflects the value of property covered or backed by the plan, not the amount of premiums collected or the cost of a particular homeowner’s policy.

FAIR Plan policies can also provide less coverage than a standard private policy and may cost more, according to the Los Angeles Times. That makes the availability of private coverage important even if new capacity does not produce lower prices immediately.

Court ruling leaves room for wildfire surcharges

Homeowners may also continue to face costs tied to the FAIR Plan’s financial losses. On July 2, a Los Angeles County Superior Court judge upheld wildfire-related surcharges that insurers imposed after the FAIR Plan needed a $1 billion assessment to help pay claims from the January 2025 fires.

The ruling allowed insurers to pass on part of that assessment to residential policyholders. The Los Angeles Times reported that the median homeowner fee was $28, although the amount can vary with the size of a policy’s premium and may be spread over monthly payments. The decision does not mean every insurer has imposed the same surcharge on every homeowner, but it leaves the approved recovery mechanism in place.

What homeowners should ask now

• Is the quote for an admitted insurer, the FAIR Plan, non-admitted coverage or a supplemental policy?
• Is the carrier currently writing policies for my address, or is the expansion pending or scheduled for a future date?
• What wildfire risk score does the insurer assign to the property, and how can that score be challenged?
• What proof is required for mitigation work such as a Class A roof, ember-resistant vents, defensible space or cleared vegetation?
• Will the policy include a mitigation discount, and when would the savings appear?
• Could FAIR Plan assessments or other approved charges affect the premium?

Under the state’s Safer from Wildfires rules, insurers must provide a property’s wildfire risk score when a consumer applies, before a renewal or non-renewal and after completed mitigation work when the homeowner requests an updated score. Insurers must explain the score, how it can be lowered and how much the homeowner could save. A homeowner can appeal a score to the insurer and seek help from the Department of Insurance if the appeal is denied.

Mitigation that may qualify for discounts includes a Class A fire-rated roof, an ember-resistant zone around the structure, ember-resistant vents, enclosed eaves, cleared vegetation and debris, and other measures listed by the department. Requirements and discount amounts can vary by insurer, so homeowners should keep permits, inspection reports, photographs and other documentation.

What to watch next

The next milestones are the department’s decision on Liberty Mutual’s filing, the January 2027 start date for USAA’s planned expansion and evidence that policy counts and actual quotes improve in distressed ZIP Codes.

Until those steps occur, Californians should treat the announcements as signs of potential additional capacity, not as a guarantee that private coverage is available or affordable for a particular home today.

Sources

• California Department of Insurance: Insurance surge expanding options for Californians in wildfire distressed areas
• Los Angeles Times: Home insurer surcharges for wildfires is legal, judge rules

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