Homeowners insurance has become one of the most important parts of buying or selling a home in California. In wildfire-aware communities like Agoura Hills, Oak Park, Malibu and parts of Thousand Oaks and Westlake Village, the cost and availability of insurance can affect a buyer's monthly payment, loan approval and even which homes they consider. The good news: the market is showing early signs of improvement, and prepared buyers and sellers can navigate it with confidence.
Why is home insurance so expensive in California?
Wildfire losses pushed many insurers to limit new policies starting in 2023. Since 2020, California homeowners insurance premiums have risen about 84%, according to Stanford University research. As private options narrowed, more homeowners moved to the California FAIR Plan, the state's insurer of last resort, which grew from under 2% to about 5% of homes.
What is the California FAIR Plan?
The FAIR Plan provides basic fire coverage for homeowners who can't find a policy in the private market. It's usually paired with a separate "difference in conditions" (DIC) policy that covers theft, liability and water damage. FAIR Plan rates rose an average of 29.1% for new and renewing policies starting October 15, 2026, with the largest increases in high-fire-risk areas.
Are insurance companies coming back to California?
Yes, gradually. Under the state's Sustainable Insurance Strategy, insurers can use modern wildfire risk models when setting rates, but in exchange must commit to writing more policies in wildfire-distressed areas. Nine insurers, including six of the state's 10 largest home insurance groups, have committed to expand. FAIR Plan growth slowed to under 2% in mid-2026, a sign that private options are slowly returning.
How can I lower my home insurance premium?
California's Safer from Wildfires rules require insurers to offer discounts for proven home-hardening steps. Common upgrades include:
- A Class A fire-rated roof
- Ember-resistant vents and enclosed eaves
- Double-pane or tempered glass windows
- A non-combustible 5-foot zone around the home (no bark mulch or wood fencing touching the house)
- Cleared vegetation and defensible space
Ask your insurance agent which discounts you qualify for and keep receipts and photos of every upgrade.
What should home buyers do about insurance?
Shop for insurance as soon as you're in escrow, or even before you make an offer on a home in a hillside or canyon area. Get quotes from an independent broker, factor the premium into your monthly budget, and use your contingency period to confirm the home is insurable. Your lender will require proof of coverage before closing.
What should home sellers do about insurance?
Help buyers feel confident. Gather your current policy details, any claims history, and documentation of fire-hardening improvements. A home that can show a Class A roof, upgraded vents and maintained defensible space can stand out to buyers and their insurers, especially in today's buyer's market.
California Home Insurance FAQ
Can I buy a home if I can only get the FAIR Plan? Yes. Many buyers close using the FAIR Plan plus a DIC policy; in early 2026 roughly 1 in 17 new California home loans used FAIR Plan coverage.
When should I get homeowners insurance quotes when buying? As early as possible, ideally before your contingencies are removed.
Do fire-hardening upgrades really lower premiums? California requires insurers to offer discounts for qualifying mitigation, so upgrades can reduce your premium and improve insurability.
Does wildfire risk affect home values in the Conejo Valley? Insurance cost and availability are now part of every buyer's decision, which makes documentation of home hardening more valuable when you sell.
Sources: Stanford Woods Institute, 2026 · FAIR Plan 29.1% rate increase, Orange County Register via InsuranceNewsNet · California Department of Insurance, Aug 2026 · Insurance Journal, Sept 2026 · FAIR Plan share of new home loans
Buying or selling in Agoura Hills, Oak Park, Malibu, Thousand Oaks, Westlake Village or Newbury Park? I'm Karen Sandvig, Coldwell Banker Realty Luxury Property Specialist. I'll connect you with trusted local insurance brokers early, so insurance never derails your purchase or sale. DRE#01507450
