California’s insurance market needs a regulatory overhaul that matches the risks Californians actually face. That urgency is hard to ignore. The California Department of Insurance reported in October that 696,562 homeowner and commercial policies were in the FAIR Plan, the state’s insurer of last resort, as of June 2026.
At the same time, 8 homeowners rate filings were under review. The department has made meaningful progress, including catastrophe modeling and changes to rate review. But these steps are scaffolding around a structure built for another era.
The foundation is Proposition 103, approved by voters in 1988. Its prior-approval system was created to protect consumers from excessive rates and encourage competition. Those goals remain legitimate.
The problem is that California is now trying to govern a radically different risk environment with rules designed nearly four decades ago. Wildfire exposure has changed. Catastrophe modeling has changed.
The volume and complexity of insurance data have changed. Regulation has to change with them. I welcome the recent reforms.
Allowing better catastrophe data and more risk-based pricing can help insurers make rational decisions about where and how much coverage they can offer. The Department of Insurance’s data show 12 homeowner insurance groups expanding in California, compared with none in 2025. That is movement in the right direction.
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