California homeowners like you and I are feeling the insurance crisis. Rather than a free market responding to various risks, patterns emerging over the past several years suggest an indirect but effective collusion between the state government, led by the insurance commissioner, and regulatory policy.
This has resulted in a systematic push of homeowners out of the private market and into the California FAIR Plan — the insurer of last resort. My husband is a State Farm agent, and we cannot even insure our own property, so we understand what all homeowners are feeling in this market.
Several insurance companies stopped writing new homeowners policies in California in 2023, citing wildfire risk that has been unmitigated by the state and lack of ability to price for risk. Many insurers have balked at expanding coverage or renewing policies in certain areas unless rate increases are approved to account for that increased risk.
But California’s regulatory system — particularly Proposition 103’s requirement that all rate changes be approved by the insurance commissioner — creates lengthy delays and limits insurers’ ability to price for risk, which in turn discourages private carriers from doing any business whatsoever in this state. The elimination of competition because of decreased insurance companies in the market then hurts consumers.
Think about it — imagine being told you could not price your own goods or services and that the government essentially gets to do that for you. That makes no sense, correct? You would go do business somewhere else.
Instead of loosening regulatory controls to keep insurers in the market writing policies in California, regulators in the name of “consumer protection” have maintained stifling regulatory control, even as private insurers have left the state. This has concentrated risk into the state’s FAIR Plan — a state-backed insurer originally designed as a temporary stopgap, not a long-term program.
In 2023, 330,000 homes were covered by the FAIR Plan. In 2025, that number almost doubled to 610,000 homes. Policy count increases have continued: Consumer Watchdog reported that the FAIR Plan added 21,859 residential policies in just the final three months of 2025 alone.
The FAIR Plan’s expansion — from a small safety net to the only available option — is not what the FAIR Plan was ever intended for. Official FAIR Plan documentation continues to describe it as a “last-resort insurer,” meant only for situations where “traditional coverage is not available.”
Consumer advocates have been vocal about the consequences of what is happening in our state.
Carmen Balber, executive director of Consumer Watchdog, puts it bluntly: “The FAIR Plan added more policies in the last three months than the commissioner’s strategy will add in the state in the next two years.” She argues this demonstrates that regulatory efforts haven’t reversed the insurance problem but have helped funnel homeowners into the state’s FAIR Plan.
Homeowners are experiencing peak frustration and, ironically, the FAIR Plan itself is now requesting a roughly 36% average rate increase on its policies. This is a clear sign that even the “insurer of last resort” may not be sustainable under its current structure. Perhaps the state should have just let the insurance companies compete and or give them the same rate increases now sought by the FAIR Plan to keep them here.
This isn’t about secret meetings or hidden handshakes. It’s about policy effects of a regulatory framework that restricts insurers from competing in the open marketplace, and the retreat of insurance carriers from California as a result. These regulatory decisions and non action by the insurance commissioner have given insurance companies no choice but to halt writing new policies until something changes.
And us homeowners suffer.
Viewed together, it appears that these factors point to a purposeful state-driven market outcome. California’s homeowners insurance landscape has not merely shifted; it has been wholly transformed. What began as a small safety net has become, for many, the only option. Californians increasingly have no real choice beyond the FAIR Plan. Homeowners have been pushed out of their private insurance policies and into a state-managed plan with its own rising costs and limited coverage options.
That outcome demands strict scrutiny. It demands action. If state public policy is driving consumers to an state-administered insurer of last resort, then the fault is not just in the wildfires or in the insurers’ choices — it lies with the elected regulators and state policies that have failed to maintain a viable and affordable private insurance market.
And it smells sorta fishy.
Denise Lite is a Santa Clarita resident. “Right Here, Right Now” appears Saturdays and rotates among local Republicans.
