What the California FAIR Plan is
The California FAIR Plan is the state's insurer of last resort. It sells basic fire insurance to property owners who cannot get coverage from a regular insurer. The California Department of Insurance (CDI) describes it as "a private association whose day-to-day operations are controlled by insurance companies, not taxpayers," and notes it was established more than 50 years ago. Its members are the insurers that sell property coverage in California, and they can be assessed to help pay its losses.
The plan has grown fast. As of September 2026, the FAIR Plan reported 698,307 policies in force across dwelling and commercial lines, up 8% from September 2025 and 157% from September 2022. Total exposure, the value it insures, reached $773 billion.
What a FAIR Plan dwelling policy covers
The FAIR Plan's dwelling fire policy is a named-peril policy. It pays only for damage from the causes listed in the policy: fire and lightning, internal explosion and smoke. Vandalism and malicious mischief can be added for an extra charge. The policy can cover owner-occupied homes, seasonal rentals, rentals, renters and condo unit owners.
What a FAIR Plan policy does not cover
A standard homeowners policy covers far more. The FAIR Plan policy does not include water damage, theft or personal liability, and it does not cover earthquake or flood. To fill those gaps you buy a separate difference in conditions policy, flood policy or earthquake policy, as the FAIR Plan itself advises.
Who needs the FAIR Plan
You need the FAIR Plan only when no regular insurer will write your home. The FAIR Plan's own application page says it plainly: "If coverage is available in the traditional marketplace, the California FAIR Plan is not right for you." Most FAIR Plan homes fall into one of these situations.
Homes in high wildfire risk areas
Insurers price and select homes by wildfire risk. Homes in brush-covered hills, mountain towns and wildland edges are the most likely to be turned down. Before you buy, look up the property on the state's fire hazard maps; our California wildfire zones guide explains how.
Homeowners who received a non-renewal
If your insurer declines to renew, you have time to shop, but the regular market may be thin. A broker can check several admitted and surplus lines insurers before placing you with the FAIR Plan. After declared wildfires, the Commissioner can also order a moratorium on non-renewals in affected ZIP codes, as CDI did in January 2026 after the Gifford Fire and in August 2026 after the Gann Fire.
Getting back out through the clearinghouse
The FAIR Plan runs a clearinghouse that lets member insurers review FAIR Plan policies and offer to place them in the regular market. CDI's February 2026 announcement of the Make It FAIR Act said the bill aims to improve these clearinghouse programs and speed policyholders back to the regular market.
FAIR Plan coverage limits
The FAIR Plan caps how much it will insure at one location. CDI lists these limits:
| Policy type | Maximum limit | Source date |
|---|---|---|
| Residential (dwelling) | $3 million per location | Raised to $3 million in 2019 (CDI, July 2024) |
| Commercial, high-value option | $20 million per building, $100 million per location | Agreement announced July 26, 2024 |
Residential limit: $3 million
The $3 million residential limit covers the dwelling and other parts of the policy at one location. A home that would cost more to rebuild needs a second layer, usually a surplus lines policy arranged by a broker. You are responsible for setting your rebuild cost, so ask your broker for a replacement cost estimate rather than using the purchase price. Confirm the current limit with a FAIR Plan broker before you bind, since limits can change by order of the Commissioner.
Commercial limit: $20 million per building
The commercial high-value option matters to condo associations and HOAs. If your condo building's master policy is with the FAIR Plan, ask the HOA for the declarations page so you can see the limit, the deductible and whether a separate DIC policy covers liability and water damage.
How much the FAIR Plan costs
The FAIR Plan does not publish an average premium, and it prices each home by location, construction and wildfire risk. The only way to know your price is a quote from a broker. Three facts shape what you will pay.
The 29.1% average rate increase in October 2026
The California Department of Insurance approved an overall 29.1% average rate increase for FAIR Plan dwelling policies, effective October 15, 2026 for new and renewing policies. Individual changes vary by risk. The FAIR Plan said its filing generally followed the Sustainable Insurance Strategy guidelines, which allow state-reviewed wildfire catastrophe models and the net cost of reinsurance in rates.
Wildfire hardening discounts
The FAIR Plan offers discounts on the wildfire part of the premium for homes and communities that reduce wildfire risk. The measures follow the state's Safer from Wildfires framework: a Class A fire-rated roof, a 5-foot ember-resistant zone around the house, ember- and fire-resistant vents, enclosed eaves, six vertical inches of noncombustible material at the base of exterior walls, defensible space, and community programs such as Firewise USA. Ask your broker which of these the FAIR Plan has on file for your home.
Worked example: what a 29.1% increase means
Take a home whose FAIR Plan premium was $3,000 before the change. An increase equal to the average works out like this: $3,000 x 0.291 = $873, so the renewal would be $3,000 + $873 = $3,873. Add the cost of a DIC policy on top. Your own change may be higher or lower, because 29.1% is an average across all dwelling policies.
Payment options help with cash flow. CDI notes the FAIR Plan offers monthly payments with no fee, and credit card payments carry a fee that covers processing cost only.
Difference in conditions (DIC) policies
A difference in conditions policy is the second half of most FAIR Plan setups. The FAIR Plan says DIC policies provide "coverages that are not available through the California FAIR Plan," such as water damage, theft and liability, and that together the two policies offer protection "similar to that in a comprehensive homeowner's policy."
Who sells DIC coverage
The FAIR Plan does not sell DIC policies. Regular insurers and surplus lines carriers do, through brokers. CDI keeps a list of companies that sell DIC policies on its website. Ask for a quote on both policies at the same time so the coverage lines up.
How to check the two policies fit
Line up the declarations pages side by side. Check that the DIC policy covers the perils the FAIR Plan excludes, that its dwelling limit matches, and that liability, loss of use and personal property are included. Gaps usually appear in loss of use (rent while you rebuild) and in water damage limits.
How to apply for the FAIR Plan
You apply through a licensed broker or agent who is registered with the FAIR Plan. The FAIR Plan says brokers charge no extra fee for placing the policy, and that not every broker can place business with it, so confirm first.
- Find a registered broker. Use the Find a Broker tool on cfpnet.com, or call the FAIR Plan at 800-339-4099.
- Let the broker search the regular market. The broker must make a diligent search for comprehensive coverage first.
- Choose coverage. If no regular insurer will write the home, pick FAIR Plan limits and add a DIC, flood or earthquake policy as needed.
- Set your rebuild cost. You are responsible for the dwelling value. Base it on a replacement cost estimate.
- Bind both policies before closing if you are buying, and send the declarations pages to your lender.
Documents to have ready
Have the property address, year built, square footage, roof type and age, and any wildfire hardening work with receipts or photos. If you are buying, have the purchase contract and the lender's insurance requirements. Ask your broker what else the FAIR Plan needs for your property.
How the FAIR Plan affects buying and selling
Insurance now shapes home sales in parts of California. A buyer cannot close with a mortgage until the home is insured, so the insurance search belongs early in escrow.
Buying a home that needs FAIR Plan coverage
Start quotes as soon as your offer is accepted, and ask the seller for the current insurer and premium. Build the FAIR Plan premium plus the DIC premium into your monthly budget before you remove contingencies. Our guide to buying a house in California covers contingency timing.
What lenders require
Fannie Mae's Selling Guide expects property insurance written on a "Special" coverage form or equivalent, with minimum perils that include fire, lightning, explosion, windstorm, hail and smoke, and a maximum deductible of 5% of the coverage amount. A named-peril FAIR Plan policy alone may not meet a lender's rules, so ask your lender in writing whether a FAIR Plan policy plus a DIC policy is acceptable.
Selling a home insured by the FAIR Plan
Tell buyers early. Share the current premium, the wildfire hardening you have done and any inspection reports, because these affect the buyer's quotes. Keep your own policy in force until closing. See our guide to selling a house in California and the seller disclosure guide for what you must disclose.
Recent changes to the FAIR Plan
The Sustainable Insurance Strategy
Commissioner Ricardo Lara announced the Sustainable Insurance Strategy on September 21, 2023. Insurers may use forward-looking wildfire catastrophe models and California-only net reinsurance costs in their rates. In return they commit to write at least 85% of their statewide market share in wildfire-distressed areas, and homes that meet Safer from Wildfires standards get priority when moving back from the FAIR Plan. In August 2025, CDI finished reviewing three wildfire models (Verisk, Karen Clark and Company, and Moody's), and by September 2026 it reported that 12 insurance groups had filed or received approval under the framework.
The $1 billion assessment in February 2025
After the Los Angeles wildfires, the Commissioner approved the FAIR Plan's request for a $1 billion assessment on its member insurers on February 11, 2025. Under a 2024 agreement, insurers cover half, and they may seek to recover the other half from their own policyholders through a temporary supplemental fee, only with the Commissioner's prior approval. CDI said insurers cannot pass the assessment into future rates. The last FAIR Plan assessments came after the 1993 fires and the 1994 Northridge earthquake.
The Make It FAIR Act (AB 1680)
On February 2, 2026, Commissioner Lara and Assemblymember Lisa Calderon announced AB 1680. It would require a more comprehensive homeowners option, more staff for claims, a stronger clearinghouse, public governing committee meetings, a climate risk assessment and a capital and liquidity plan. Check the bill's status on leginfo.legislature.ca.gov before relying on any of it.
Major insurers moving to reopen
On September 18, 2026, CDI reported that State Farm General filed to resume new homeowners applications for the first time since May 2023, and that Allstate filed under the Sustainable Insurance Strategy. Neither was open to new business on that date. If you are on the FAIR Plan, ask your broker to re-shop your home each year.
Common FAIR Plan mistakes
- Buying the FAIR Plan alone. Without a DIC policy you have no liability or theft cover and no water damage cover.
- Insuring to the purchase price. Rebuild cost and market value differ. Use a replacement cost estimate.
- Skipping hardening discounts. Document every wildfire upgrade and send it to your broker.
- Never re-shopping. Insurers are filing to reopen. Ask your broker to check the regular market at each renewal.
- Forgetting earthquake. Neither the FAIR Plan dwelling policy nor a typical DIC policy replaces earthquake insurance. See our California earthquake insurance guide.
For the wider market, including how to compare quotes from regular insurers, read our California homeowners insurance guide.