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
The California Department of Insurance approved a 29.1% average rate increase for the FAIR Plan’s dwelling program, effective October 15, 2026. The FAIR Plan asked for 35.8%; the regulator cut it. Your own increase depends on your property’s wildfire exposure, so 29.1% is a midpoint rather than a forecast for your address. If your premium is escrowed, your servicer recalculates your monthly payment once the new premium posts, which can change your debt-to-income ratio on a refinance and changes the payment a buyer’s lender sees if you list. The increase reaches you on your renewal date, and that date is the only real deadline here.
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, as of August 13, 2026
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, cleared Senate Insurance in June, and on August 13, 2026 cleared Senate Appropriations on a 7-0 “do pass” vote, off the suspense file it had been placed on August 3. It is headed to a Senate floor vote.
Be careful with what you may have read about it. The February 2026 introduced version included a mandate for comprehensive homeowners coverage with water damage and liability. June Senate amendments stripped that mandate. The current text gives the Commissioner discretionary authority over FAIR Plan policy limits and additional coverage offerings, along with corrective actions, civil penalties up to $20,000, and new governance and transparency requirements. The surviving coverage-expansion language points at fair rental value under the renters’ program. If someone tells you a pending bill is about to give FAIR Plan homeowners water damage coverage, they are reading the February version.
Those provisions trace to the Department’s recent market-conduct examination of the FAIR Plan, a different origin story than legislators proposing reforms. Clearing Appropriations 7-0 on August 13 moves the bill, and it is not law. It still needs a Senate floor vote, then Assembly concurrence if the Senate amended it, then the Governor’s signature or veto — and the session ends August 31. Check the status yourself before relying on this.
Five things to check before your renewal date
- Find your renewal date. The new rate applies at renewal on or after October 15, not before. Everything else keys off this date.
- 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.
- If you escrow, ask your servicer what the new premium does to your payment and when the analysis runs.
- 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.
- 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. The harder question is what staying in this house costs once insurance is a permanent, escalating line rather than a rounding error, and whether the plan you built around the old number 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 without a credit pull, 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.
Key takeaways
- The approved FAIR Plan dwelling increase is 29.1% on average, effective October 15, 2026 — the Plan had asked for 35.8%.
- Your increase lands at renewal, automatically; higher-wildfire-risk properties see more than 29.1%, some see decreases.
- If your premium is escrowed, your servicer recalculates your monthly payment — which can change refinance DTI and buyer math.
- 668,609 policies and $724 billion in exposure make the “last resort” a fixture, not a backstop.
- AB 1680 cleared Senate Appropriations 7–0 on August 13 and needs a Senate floor vote by August 31.
FAQ
Will my premium go up exactly 29.1%?
Probably not. It is the approved average for the dwelling program, and it reaches you at your first renewal on or after October 15, 2026. The FAIR Plan has stated that the largest component of the increase relates to the wildfire portion of the premium, so higher-risk properties see larger increases and some policyholders see a decrease.
Does this affect me if I am not on the FAIR Plan?
Possibly. Member insurers are permitted to recoup a portion of the $1 billion assessment. We have not verified the exact mechanics against the Department’s order, so ask your carrier directly.
Why would my mortgage payment change if only my insurance changed?
Because escrowed premiums are collected inside your monthly payment. When the premium rises, your servicer re-runs the escrow analysis and adjusts the payment to cover the higher premium and the required cushion. In the first year it often lands as more than one-twelfth of the premium change.
Should I reduce coverage to keep the premium down?
That is a conversation for a licensed insurance professional, and we would urge caution. In a state where the last-resort insurer just paid nearly $3.5 billion on about 5,400 claims, underinsurance is the more expensive failure.
Is AB 1680 going to expand what the FAIR Plan covers?
Not the way early coverage described. The water damage and liability mandate was in the February 2026 introduced version and was amended out in June. On August 13, 2026 the bill cleared Senate Appropriations on a 7-0 “do pass” vote and is headed to a Senate floor vote. It is not law: a floor vote, Assembly concurrence if the Senate amended it, and the Governor’s signature all remain, with the session ending August 31.
Written and reviewed by Kiyoshi Inui, Co-Founder, Solve Lending & Realty (NMLS #1173299). Figures last verified August 7, 2026 against the primary sources below; AB 1680’s legislative status was last checked August 18, 2026. Two items here are actively moving: the bill can change within days as it moves toward a Senate floor vote ahead of the August 31, 2026 end of session, and 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.
Sources: California Assembly Insurance Committee, FAIR Plan oversight background, January 28, 2026 (policy count, $724 billion exposure, 146% and 230% growth, claims paid, $1 billion assessment, Northridge comparison) · California Assembly Insurance Committee, FAIR Plan hearing background, May 28, 2025 (earlier policy counts and Palisades exposure figures) · California Department of Insurance, rate filing Virtual Viewing Room (where the approved dwelling-program filing is viewable; the Department issued no press release on this approval) · California Department of Insurance press release, February 2, 2026 (announces the “Make It FAIR Act” as introduced; the water damage and liability mandate described there was amended out in June 2026 and this release does not describe the current bill) · AB 1680 bill text and status · Reporting on the approved 29.1% increase and the 35.8% request: KRCR, InsuranceNewsNet, Insurance Business · Q1 2026 policy-growth figures are from a California Department of Insurance alert; no stable public URL was available at verification.
Solve Lending & Realty is a California mortgage broker and licensed real estate brokerage — we arrange financing; we don’t lend. We are not an insurance agency, and nothing here is insurance advice; coverage decisions belong with a licensed insurance professional. Options vary by credit, equity, income, property type, occupancy, and lender guidelines; subject to qualification. NMLS #2013271 | DRE #02123993 | Equal Housing Opportunity.
