The FAIR Plan Raises Rates 29.1% on October 15. Here’s What It Does to Your Mortgage Payment.

More than 668,000 California properties carried a FAIR Plan policy as of December 2025. Most of those households will learn about their rate increase when the bill arrives. It applies at renewal, automatically, to all new and renewal dwelling business from October 15 forward, with no opt-in and no notice to miss.

The insurance reporting has been careful, and it stops at the premium. For a homeowner with a mortgage, the premium is where the story starts.

The quick answer

What was approved, stated precisely

The 29.1% applies to the FAIR Plan’s dwelling program, the residential side. Commercial policies run on a separate rate program and are not covered by this filing, so if you sit on an HOA board or hold rental property commercially, confirm which program you are on.

One sourcing note, so you know how solid the ground is. The Department published no press release. A department spokesman confirmed the approval to reporters on May 20, 2026, and the filing itself is viewable only through the Department’s Virtual Viewing Room. The number and date are real. The paper trail is thinner than a story this size deserves.

The gap between requested and approved matters. The FAIR Plan filed for 35.8%, its largest request in seven years, and received 29.1%. It also stated that under the guidelines in place before California’s Sustainable Insurance Strategy, it would have sought roughly 80%.

“Average” is doing a lot of work in that sentence

The FAIR Plan’s own on-record framing: the largest component of the increase relates to the wildfire portion of policyholders’ premiums, so policyholders whose properties carry significant wildfire risk will see a higher increase than those at lower risk, and some policyholders will see a premium decrease.

That is more useful than any range being passed around. Regional reporting already cites 30–40% in some areas, though that figure traces to one insurance agent’s observation in Redding-area television coverage rather than to the filing. Treat it as a data point from the field, not a statewide number.

One warning: the “40–55%” and “300%” figures circulating with this story describe the 35.8% request, not the approved 29.1%.

How the last resort became the first option

The FAIR Plan was designed as a backstop. It now functions as a fixture.

Policies in force reached 668,609 as of December 2025, up 146% since September 2022, according to the Assembly Insurance Committee’s oversight background dated January 28, 2026. Total exposure reached $724 billion over that same span, up 230%. That is three-quarters of a trillion dollars of risk sitting on the state’s insurer of last resort.

Then January 2025 arrived. Per that same document, the FAIR Plan handled about 5,400 Pacific Palisades and Eaton wildfire claims and paid nearly $3.5 billion to policyholders. On February 11, 2025, it assessed its member insurers $1 billion, the first such assessment since the Northridge earthquake era of 1993 to 1995, which totaled roughly $260 million. Four times the size, from one January.

The trend line is not a straight climb, though. A Department of Insurance alert reports about 16,000 residential policies added in the first quarter of 2026, near 2.4% growth, down from 4% the prior quarter. Growth is decelerating, which makes this structural rather than runaway. Structural is harder to wait out.

The part that reaches homeowners who are not on the FAIR Plan

When the FAIR Plan assesses its member insurers, those insurers are permitted to recoup a portion of the assessment. The mechanism is set by the Department’s order, and we have not verified the exact pass-through mechanics against that order, so we are raising it as a question rather than stating it as fact.

If it works the way committee materials and press coverage describe, the FAIR Plan’s losses do not stop at 668,609 policies. They reach Californians who never went near the FAIR Plan. Ask your carrier whether any part of the 2025 assessment shows up in your renewal.

Why a mortgage broker is writing about your insurance bill

Because the premium does not stay in the insurance column.

If your taxes and insurance are escrowed, your servicer collects the new premium and runs an escrow analysis. Your payment goes up, often by more than one-twelfth of the increase, because the servicer also rebuilds the required cushion. Homeowners routinely call us about a payment increase they assumed was a servicing error. It usually is not.

That payment then follows you. It sits in your debt-to-income ratio the next time you apply for anything secured by the property, which can narrow what you qualify for on a refinance you penciled out months ago. When you sell, the buyer’s lender underwrites their payment on the insurance quote available at that address today, not the premium you paid in 2021. In Los Angeles County and Riverside County, where we field the most FAIR Plan questions, that is already changing what buyers can offer.

FACT: the increase is approved and dated. INTERPRETATION: for anyone who escrows, it functions as a payment increase rather than a premium increase. INFERENCE, ours and labeled as such: stretched households will feel this as a housing-cost event, and some will look at equity to absorb it.

If that is your direction, look at it with clear eyes. A second mortgage or HELOC borrows against the house to pay the bill that insures the house, which is sound bridging or slow erosion depending on whether the premium is a one-year shock or a permanent cost. Our EquitySelect writeup lays out those tradeoffs, and for homeowners over 62 a reverse mortgage sometimes solves the cash-flow problem and sometimes costs more than it solves. Start by checking your California home value so the math begins from a real number.

Where the Legislature stands

AB 1680, authored by Assembly Insurance Chair Lisa Calderon and branded the “Make It FAIR Act” by Commissioner Ricardo Lara, passed the Assembly 62-8 on May 21, 2026 and cleared Senate Insurance in June. AB 1680 passed both houses and was enrolled September 4, 2026; it awaits the Governor’s signature or veto. Check the Legislature’s site for current status.

Status last checked: September 9, 2026. Re-check by September 30, 2026, and again when the bill is chaptered or vetoed.

Be careful with what you may have read about it. The Department of Insurance announcement of February 2, 2026 described the Act as adding a more comprehensive homeowners coverage option, naming water damage and liability. The enrolled bill does not contain it: the words water damage, liability and comprehensive appear nowhere in the enrolled text. What that text does is add Insurance Code sections 10100.4 and 10100.5 and amend section 10095. Section 10100.4 lets the Commissioner require the FAIR Plan to adjust the policy limits available under its programs and to make additional coverage offerings available for fair rental value under its renters’ property insurance program. Section 10100.5 sets a civil penalty of up to $10,000 for each act, or up to $20,000 for each act if the act was willful. Section 10095 requires the FAIR Plan to take the corrective actions the Commissioner specifies to fix violations identified in an examination report, with a penalty of up to $20,000 for each failure to take one, and it adds a required broker training course and quarterly clearinghouse reporting. If someone tells you a pending bill is about to give FAIR Plan homeowners water damage coverage, they are reading the February announcement.

Those provisions trace to the Department’s recent market-conduct examination of the FAIR Plan, a different origin story than legislators proposing reforms. AB 1680 passed both houses and was enrolled September 4, 2026; it awaits the Governor’s signature or veto. Check the Legislature’s site for current status. It is not law until the Governor signs it or it becomes law without signature.

Five things to check before your renewal date

1. Find your renewal date. The new rate applies at renewal on or after October 15, not before. Everything else keys off this date.
2. Compare admitted-market options 60 to 90 days out with a licensed insurance professional. Carriers have re-entered parts of California under the Sustainable Insurance Strategy, and properties that qualified for nothing in 2024 sometimes qualify now.
3. If you escrow, ask your servicer what the new premium does to your payment and when the analysis runs.
4. Re-run any refinance, DTI, or sell-versus-hold math with the new payment in it. A model built on last year’s premium describes a payment that no longer exists.
5. Compare coverage structure before price. Thinning coverage to chase a premium turns a bad year into a catastrophic one, and that decision belongs with a licensed insurance professional.

Most households can absorb one higher bill. For some households the question becomes whether the plan built around the old premium still holds. That is a mortgage question as much as a policy question.

If you want the new premium run through your real numbers before renewal, that is what a no-pitch equity and payment review is. Call or text (562) 262-9162, or request a no-pitch equity review. We can review general options, and we will tell you plainly when the answer is to change nothing.

Not ready to talk to anyone yet? Start with what your California home is worth today, then decide.

FAQ

Written and reviewed by Kiyoshi Inui, California Mortgage Strategist, Solve Lending & Realty (NMLS #1173299). Figures last verified August 7, 2026 against the primary sources below; AB 1680’s legislative status was last checked September 9, 2026: it passed both houses, was enrolled September 4, 2026, and awaits the Governor’s signature or veto, so its status can change on any day the Governor acts. FAIR Plan policy counts and exposure are updated in Assembly Insurance Committee oversight materials and Department of Insurance alerts on their own schedule. The pass-through mechanics of the 2025 member assessment are described here but not independently verified. Whether any of this changes your situation requires individual analysis, and coverage decisions require a licensed insurance professional.

Written by Kiyoshi Inui: NMLS 1173299
California Mortgage Strategist, Solve Lending & Realty