After almost five years of chaos in the CA property insurance market, we are seeing the first signs of the market slowly reopening in the second half of 2026. The sustainable insurance strategy proposed by the DOI (Department of Insurance), if adopted by admitted insurance carriers -- the carrier would agree to resume writing new business in 85% of wildfire risk areas, up to their market share. One carrier in particular, has accepted that proposal, received approval from the DOI, and will open up their markets on July 1. Other carriers may soon follow, as evidenced by one carrier, that is filing their request now. While we are currently in the status quo with the same issues in the property insurance market, knowing that change is coming means being prepared. Below are the key points to keep in mind.
The market will not reopen everywhere. Carriers that are approved will be required to insure 85% of the high wildfire areas, and even then, once they reach their market share, they will close that area once again. Areas of low fire risk may remain closed if the carrier has reached their market capacity.
Stability in the market does not necessarily translate to stability in pricing. We expect premiums to continue to rise.
Many carriers will require that you bundle your home and your auto policies to access their homeowners product.
If you are currently with the FAIR plan or a non-admitted, or surplus carrier, it may be possible to move back to an admitted carrier when the market opens up. Meanwhile, it is possible that you might receive a non-renewal from your current carrier. Either way, you should be prepared. Please see our top 5 tips below.
1. We strongly recommend all property owners keep their homes up to date because:
- As a preventative measure, it may help you avoid non-renewal.
- Updates may be required as a condition of your next renewal.
- If you are currently in the FAIR plan or with a non-admitted carrier, you are more likely to qualify for an admitted policy when it becomes available.
- If you are non-renewed, most carriers have very strict underwriting guidelines for new coverage. Just because you get a policy, doesn't mean you can keep it. A new policy means a reinspection of your property, and your home must be updated, or you could be subject to cancellation.
Keep in mind:
- Most carriers, and even the FAIR plan, will not give full replacement value for a roof more than 25 years old. Some carriers will only offer Actual Cash Value for roofs that are over 10 years old, which most lenders will not allow. Many carriers may not insure you at all if your roof is old or worn out. (For some, flat roofs can't be more than 10 years old).
- You must not have any trees or brush close to the roof or the house. Make sure no trees overhang the roofline, and that there is no debris on the roof or in the gutters. Get your roof inspected annually.
- Few carriers will accept galvanized plumbing, they want all copper.
- No carriers, except for the CA FAIR plan, will accept old electrical knob and tube wiring or fuse boxes, aluminum wiring, or hazardous breaker boxes, such as Federal Pacific, Stabloc, or Zinsco.
- Your furnace must be less than 35 years old.
- Make sure your yard and property are free from debris, trip hazards, and that the exterior of the home has no peeling paint or dry rot. If you do get a new insurance policy, the carrier will send out an inspector within 30 days.
- Your policy may be canceled if the property has any of the above hazards.
2. Make sure your policy doesn't expire due to non-payment. If you don't pay by the day before your policy expiration date, you may lose your policy. As a safeguard, enroll in auto pay with a checking account, or make sure the payment is made by your lender before your expiration date. If they don't pay, you may lose your policy. You are ultimately responsible to pay the insurance bill, not your lender.
3. Don't file claims, if at all possible. Everyone says, what is insurance for if I can't file a claim? We understand, and you can, but there will be repercussions. For example, if you file a claim that is denied, or if the damages are lower than your deductible, not only will your loss not be covered, the claim will be on your record for years. Claims will follow you, even if you move to another carrier. When a claim results in no money paid out, the fact that you filed a claim will be a strike against you. We have found it difficult to move a home to a new carrier if the home has a claim that is less than 7 years old. Multiple claims, water claims and liability claims are the biggest red flags for insurers. Keep your property free of hazards to prevent claims. Get a water sensor, and a water shut off valve. Get your roof inspected annually, which will help prevent large water claims. Bottom line: call your agent for advice before filing a home claim.
4. Open every letter, email, and take every call by your insurance company, or your agent. You may get a letter stating conditions for your next renewal, and if you do not comply, the carrier will non-renew your policy. Respond as quickly as possible, and do not wait until the last minute.
5. If you do get a non-renewal, there is usually nothing you can do to reverse the decision by the insurance company. You will need to act quickly! Check with your agent, and they will start the process of finding out the requirements for potentially rescinding your non-renewal, and if that doesn't pan out, start looking for new coverage. Due to current market conditions, most carriers are overrun with applications and quote requests. This will not change when the market reopens, as we expect overwhelming demand.