California insurers have started offering new homeowners policies after several years of restricting business as wildfire losses pushed carriers away from higher-risk areas.
The California Department of Insurance presents those announcements as evidence that Insurance Commissioner Ricardo Lara’s Sustainable Insurance Strategy is increasing availability.
The department has publicized new commitments from carriers returning to parts of the admitted market, though it hasn’t yet published a statewide count of policies insurers have written under the program.
Consumer Watchdog has produced its own estimate. The advocacy group calculates insurers have committed to 12,189 additional policies since January 2025, when major elements of Lara’s insurance reforms took effect. Its estimate comes from rate filings submitted by carriers rather than completed policy sales.
The Sustainable Insurance Strategy changed how California insurers seek approval for homeowners rates.
Companies meeting specified coverage commitments receive access to forward-looking catastrophe models when calculating wildfire risk, rather than relying exclusively on historical loss data.
The rules also permit qualifying insurers to incorporate net reinsurance costs into ratemaking. Reinsurance has become an increasingly expensive component of property coverage in wildfire-exposed regions, and carriers had long sought permission to include those costs directly in California filings.
Consumer Watchdog argues the policy commitments remain small compared with the rate increases moving through the new framework. Its review found 10 homeowners insurers have requested about $571 mn in rate increases while using the new rules. Only five of those companies committed to increasing policy counts, according to the group’s analysis.
California’s Insurance Department disputes that interpretation. It described Consumer Watchdog’s analysis as incomplete and premature, saying the agency plans to release its own data on insurer commitments and market results.
Ben Armstrong, an actuary for Consumer Watchdog, assembled the estimate by reviewing publicly available insurer rate filings. He compared current filings with previous submissions and tracked statements describing how many additional policies carriers expect to write.
Armstrong acknowledged the method doesn’t measure completed sales. Rate filings describe future commitments, and some don’t provide exact schedules for reaching their stated policy targets, leaving a gap between regulatory promises and policies already placed with customers.
Under California’s rules, insurers using catastrophe modeling or incorporating reinsurance expenses must meet coverage commitments in wildfire-distressed areas. Residential insurers have several routes depending on their existing market presence.
One option requires a carrier to write policies equal to at least 85% of its statewide market share within designated distressed areas. Another permits companies below that threshold to increase writings in those areas by at least 5%. Companies already meeting the 85% level must maintain it for three years.
The strategy also seeks to move policyholders from the California FAIR Plan back into private coverage. The state created the requirements after admitted insurers reduced new business or stopped renewing some homeowners as wildfire losses increased.
Consumer Watchdog argues the early results don’t yet demonstrate enough new coverage to offset higher premiums.
The debate comes after a decade of destructive California wildfires changed property insurance economics. Carriers argued that the state’s previous ratemaking framework prevented premiums from responding quickly enough to wildfire exposure and rising reinsurance expenses.
Several insurers subsequently restricted new homeowners business or reduced renewals in exposed areas. That contraction sent more property owners toward the FAIR Plan, the state-mandated insurance pool intended for customers unable to secure conventional coverage.
Lara’s strategy sought to reverse that movement by giving insurers broader ratemaking tools in exchange for commitments to expand coverage. The Department of Insurance says carriers including Mercury, CSAA and other companies have announced plans to increase writings under the revised framework.
FAIR Plan figures show why availability remains an issue. The plan had 696,562 dwelling and commercial policies in force as of June 2026, an 8% increase from September 2025. Its policy count has risen 157% since September 2022.
Total FAIR Plan exposure reached $768 bn in June, up 11% from September 2025 and 250% from September 2022. Growth has continued despite signs that some private carriers are beginning to expand business again.
California regulators judge the reforms over a longer period, with increased admitted-market availability and reduced reliance on the FAIR Plan among their stated measures. The department says catastrophe modeling and recognition of reinsurance costs give insurers a regulatory structure better suited to current wildfire exposure.
Consumer Watchdog is using a different measure: how many new policies insurers explicitly promise in exchange for access to the revised ratemaking framework. Its 12,189 estimate represents commitments rather than sales, leaving the actual number of newly written policies unresolved.
The disagreement now centers on measurement as much as regulation. California has evidence of insurers announcing renewed appetite, while FAIR Plan enrollment remains close to 700,000 policies and the state hasn’t released a consolidated count of new private-market policies written under the strategy.
