Can I Still Get Homeowners Insurance in Los Angeles in 2026?
State Farm left. Allstate stopped writing new policies. FAIR Plan enrollments doubled. If you are buying a home in Los Angeles, insurance is no longer an afterthought. It is a deal-breaker you must solve before you make an offer.
- What Happened: The Carrier Pullouts
- Timeline of the Crisis
- The FAIR Plan: Your Last Resort
- Surplus Lines: The Expensive Alternative
- Cost Comparison: Standard vs FAIR vs Surplus
- Legislative Responses: AB 2167 and SB 1060
- Which LA Neighborhoods Are Hardest Hit
- How Insurance Affects Home Values and Lending
- Brush Clearance and Defensible Space
- Buyer Strategy: Get Quotes Before You Offer
- How LA Compares to Other CA Markets
- Insurance Decision Cheat Sheet
- Frequently Asked Questions
If you searched "Can I get homeowners insurance in Los Angeles?" you are not alone. That question has tripled in search volume since 2023, and the answer is more complicated than a simple yes or no.
Yes, you can still get coverage. But depending on where you buy, it might cost you $5,000 to $15,000 per year instead of the $2,000 to $4,000 that was once standard. And in some hillside neighborhoods, you may have only one option: the California FAIR Plan.
This guide breaks down everything an LA homebuyer needs to understand about the insurance crisis, from what caused it to how it changes your buying strategy.
Buying in LA and worried about insurance? Text me the address and I will pull the fire zone data before you tour.
💬 Text Justin at (213) 262-5092Average response time: under 10 minutes
What Happened: The Carrier Pullouts
Between 2022 and 2024, three of the largest homeowners insurance carriers in California either stopped writing new policies entirely or severely limited new business. The impact was immediate and far-reaching.
State Farm
In May 2023, State Farm announced it would no longer accept new applications for homeowners insurance in California. The company cited growing catastrophe exposure, rising reinsurance costs, and construction cost inflation. State Farm was California's largest home insurer at the time, covering roughly 1.2 million homes statewide. Existing policyholders kept their coverage, but anyone buying a State Farm-insured home could not transfer that policy.
Allstate
Allstate had quietly stopped writing new homeowners policies in California in late 2022, months before State Farm's public announcement. The company reduced its California book of business by over 100,000 policies between 2020 and 2024. Like State Farm, Allstate pointed to wildfire risk and regulatory restrictions that prevented adequate rate increases.
Farmers Insurance
Farmers, the state's third-largest carrier, announced caps on new homeowners policies in July 2023. Rather than a full halt, Farmers limited new policies to specific areas and property types. The company also non-renewed approximately 30,000 policies in high-wildfire-risk zones across California.
When you buy a home, the seller's insurance policy does not transfer to you. Even if the seller has a great rate with State Farm, you will need to find your own coverage. And if State Farm is not writing new policies, that favorable rate is gone.
Who Is Still Writing Policies?
Several admitted carriers continue to write new homeowners policies in California, though many have tightened their underwriting standards:
- CSAA (AAA Insurance) - Still writing in most areas, higher scrutiny in WUI zones
- Mercury Insurance - California-focused carrier, selective in high-fire areas
- Nationwide - Available in many LA markets
- USAA - Available to military families
- Chubb - High-value homes, premium pricing
- AIG Private Client - Luxury market, selective underwriting
Timeline of the LA Insurance Crisis
Not sure if the home you are looking at is in a fire zone? I check every property before my clients tour.
💬 Text Me the AddressThe FAIR Plan: Your Last Resort
The California FAIR Plan (Fair Access to Insurance Requirements) is a state-mandated insurer of last resort. It exists for property owners who cannot find coverage on the private market. FAIR Plan enrollment has more than doubled since 2020, and it now covers over 350,000 properties statewide.
What the FAIR Plan Covers
- Dwelling coverage for fire and certain other perils, up to $3 million
- Other structures on the property (detached garage, fence)
- Personal property (limited; check your policy)
What the FAIR Plan Does NOT Cover
- Liability (someone gets injured on your property)
- Theft
- Water damage (pipe bursts, appliance leaks)
- Additional living expenses beyond basic limits
- Earthquake (separate policy required)
Because the FAIR Plan only covers fire and a few other perils, your mortgage lender will likely require you to also purchase a Difference in Conditions (DIC) policy. A DIC policy fills the gaps: liability, theft, water damage, and broader personal property coverage. Budget an additional $1,000 to $2,500 per year for DIC coverage on top of your FAIR Plan premium.
✓ FAIR Plan Advantages
- Available to anyone who has been declined by two admitted carriers
- Coverage up to $3 million dwelling
- Rate-regulated by the state
- Cannot deny coverage based on location
- Established claims process
✗ FAIR Plan Limitations
- No liability coverage
- No theft protection
- No water damage coverage
- Requires separate DIC policy
- Premiums 2-4x standard market rates
- Limited personal property coverage
Surplus Lines: The Expensive Alternative
The surplus lines market, also called the excess and surplus (E&S) market, is made up of insurance companies that are not "admitted" in California. They are not subject to the same rate regulations as admitted carriers, which means they can price wildfire risk more aggressively. But it also means they charge significantly more.
How the Surplus Lines Market Works
You cannot buy a surplus lines policy directly. You need a licensed surplus lines broker who will shop your property across multiple non-admitted carriers. Common surplus lines insurers operating in California include:
- Lloyd's of London syndicates
- Scottsdale Insurance Company (Nationwide subsidiary)
- Lexington Insurance (AIG subsidiary)
- Kinsale Capital Group
- Palomar Specialty Insurance
Surplus Lines vs FAIR Plan
| Feature | FAIR Plan | Surplus Lines |
|---|---|---|
| Annual Cost (typical LA home) | $5,000 - $10,000 | $8,000 - $15,000+ |
| Liability Coverage | No (need DIC policy) | Yes, included |
| Theft Coverage | No (need DIC policy) | Yes, included |
| Water Damage | No (need DIC policy) | Yes, included |
| Max Dwelling Coverage | $3 million | Varies, often higher |
| Rate Regulation | State regulated | Not rate regulated |
| CA Guarantee Fund | Yes, backed by all carriers | No state guarantee |
| Access | Need 2 declinations | Through surplus lines broker |
If you go the surplus lines route, make sure your broker is licensed with the California Department of Insurance as a surplus lines broker (not just a regular insurance agent). Ask to see their surplus lines license number. This protects you if there is a claims dispute.
I work with insurance brokers who specialize in fire-zone properties. Want an introduction?
💬 Text Me for a Broker ReferralCost Comparison: Standard vs FAIR Plan vs Surplus
Here is what insurance actually costs in 2026 for a typical $800,000 Los Angeles home, broken down by coverage source.
Annual Cost by Coverage Source
On an $800,000 home with a 30-year mortgage at 6.5%, your monthly principal and interest is roughly $5,054. Adding $12,000/year in surplus lines insurance adds another $1,000/month to your housing cost. That is the equivalent of buying a home that costs $158,000 more. Factor insurance into your purchase price ceiling, not just your mortgage qualification.
🏠 Selling in a Fire Zone? Know Your Home's Value First
Insurance costs are affecting what buyers will pay. Get your free home valuation to understand how the market is pricing your area.
📊 Get Your Free Home ValuationLegislative Responses: AB 2167, SB 1060, and Regulatory Changes
California's legislature and Insurance Commissioner have responded to the crisis with a mix of consumer protections and market incentives designed to stabilize the insurance market.
AB 2167: Wildfire Mitigation Discounts
AB 2167 requires insurance companies to offer premium discounts to homeowners who meet specific wildfire mitigation standards. If your property has verified defensible space, fire-resistant roofing, enclosed eaves, and ember-resistant vents, you qualify for a mandatory discount. The law shifts incentives: instead of just penalizing high-risk properties, it rewards homeowners who invest in fire protection.
SB 1060: FAIR Plan Reforms
SB 1060 strengthened the FAIR Plan in several ways:
- Increased transparency requirements for FAIR Plan rate-setting
- Required faster claims processing timelines
- Expanded consumer appeal rights for denied claims
- Mandated annual reporting on FAIR Plan financial stability
- Required the FAIR Plan to accept applications within 3 business days
Insurance Commissioner's Regulatory Overhaul
Perhaps the most significant change came from the Insurance Commissioner's office, not the legislature. New regulations now allow insurers to:
- Use catastrophe modeling in rate-setting (previously prohibited under Prop 103 interpretation)
- Factor reinsurance costs into their rate calculations
- File for expedited rate increases in exchange for commitments to write policies in underserved areas
The trade-off is clear: carriers that want higher rates must also commit to expanding coverage in the areas that need it most. Early signs suggest this bargain is working. Several carriers have signaled plans to re-enter the California market with new products specifically designed for fire-risk areas, though at significantly higher premiums than pre-crisis levels.
Have questions about how legislation affects your specific situation? I stay current on every change.
💬 Ask Justin DirectlyWhich LA Neighborhoods Are Hardest Hit
Not every LA neighborhood faces the same insurance challenge. The crisis hits hardest in areas designated as Very High Fire Hazard Severity Zones (VHFHSZ) by CAL FIRE and neighborhoods in the Wildland-Urban Interface (WUI) where development meets undeveloped wildland.
Neighborhood Risk Map (Text-Based)
🔥 Pacific Palisades
VERY HIGH FIRE RISKDevastated by the January 2025 Palisades Fire. VHFHSZ designation throughout. Standard carriers unavailable. FAIR Plan or surplus lines only. Expect $10K-$15K+ annually.
🔥 Altadena / Upper Pasadena
VERY HIGH FIRE RISKEaton Fire zone. Foothill areas along Angeles National Forest boundary. Most properties require FAIR Plan or surplus lines. $8K-$14K typical premiums.
🔥 Hollywood Hills / Laurel Canyon
VERY HIGH FIRE RISKNarrow, winding roads limit fire truck access. Dense brush. VHFHSZ throughout hillside areas. Very limited carrier options. $10K-$15K common.
🔥 Malibu / Topanga Canyon
VERY HIGH FIRE RISKHistory of major fires (Woolsey 2018). Entire community in WUI zone. Surplus lines often the only full-coverage option. $12K-$20K+ for coastal estates.
⚠ Eagle Rock / Mt. Washington
HIGH FIRE RISKMixed risk depending on elevation. Hilltop properties in VHFHSZ, flatland areas may still find admitted carriers. $4K-$10K range.
⚠ La Canada Flintridge / Sierra Madre
HIGH FIRE RISKFoothill communities along San Gabriel Mountains. Station Fire (2009) burn area. Most properties need FAIR Plan. $6K-$12K annually.
✅ Central Pasadena
MODERATE RISKFlatland areas south of the 210 freeway. Multiple admitted carriers available. Standard rates $2K-$4K. Some properties near Arroyo Seco may face higher scrutiny.
✅ SGV Flatlands (Arcadia, Temple City)
MODERATE RISKValley floor communities with good fire station access. Most admitted carriers still writing here. Standard rates $2K-$3.5K. Best insurance availability in the region.
Search homes in lower-risk areas: Pasadena homes | Arcadia homes | Temple City homes | San Gabriel homes
Want to know the fire zone status of a specific property? I will look it up for you in minutes.
💬 Text the Address to (213) 262-5092How Insurance Affects Home Values and Lending
The insurance crisis is not just an insurance problem. It is a real estate pricing problem, a lending problem, and in some neighborhoods, a liquidity problem.
Impact on Home Prices
Properties in Very High Fire Hazard Severity Zones are seeing measurable price pressure. When annual insurance costs jump from $3,000 to $12,000, that extra $9,000 per year reduces a buyer's purchasing power by roughly $140,000 (at current mortgage rates). Sellers in these areas are facing longer days on market and more aggressive buyer negotiations around price.
Impact on Lending
Mortgage lenders require homeowners insurance as a condition of the loan. If a buyer cannot obtain adequate insurance, the loan cannot close. Some lenders are now:
- Requiring proof of insurance earlier in the transaction (at offer, not just before closing)
- Adding insurance cost reviews to their debt-to-income calculations
- Declining loans on properties where only FAIR Plan coverage is available without a DIC policy
- Requiring minimum coverage amounts that exceed FAIR Plan limits for high-value homes
I have seen transactions fall apart because buyers assumed they could get standard insurance after the offer was accepted. By the time they discovered they needed the FAIR Plan plus surplus coverage at $12,000/year, the home no longer fit their budget. This is why you get insurance quotes before making offers, not after.
Impact on Cash Buyers
Cash buyers have an advantage in the current market because they do not need lender-required insurance. However, going uninsured or underinsured is a massive financial risk. A total loss on an $800,000 home with no insurance means an $800,000 loss. Most cash buyers still purchase coverage, but they have more flexibility on the type and amount.
📈 What Is Your Home Worth in This Market?
Insurance costs are reshaping valuations across LA. Get an updated estimate for your property.
🏠 Free Home ValuationBrush Clearance and Defensible Space: How It Affects Your Rates
California law requires property owners in fire-prone areas to maintain defensible space around their structures. Under AB 2167, verified compliance with these standards can lower your insurance premiums. Here is what each zone requires:
Ember-Resistant Zone (0-5 feet from structure)
No combustible materials. Use hardscape (gravel, concrete, stone). No plants, mulch, or wood within 5 feet of your home's exterior walls, windows, and decks. This zone was added in 2023 and is the most critical for preventing ember ignition.
Lean, Clean, Green Zone (5-30 feet)
Vegetation maintained low, trimmed, and well-watered. Trees spaced with at least 10 feet between canopies. Remove dead vegetation, dried leaves, and anything that could carry fire to your structure. This is the zone most inspectors focus on.
Reduced Fuel Zone (30-100 feet)
Reduce vegetation density. Create horizontal and vertical spacing between plants and trees. Grass kept under 4 inches. Remove ladder fuels (vegetation that allows fire to climb from ground to tree canopy). This zone reduces fire intensity as it approaches your property.
How Defensible Space Affects Your Premium
Under AB 2167, insurers must offer discounts when your property meets defensible space standards. Additional premium reductions are available for:
- Fire-resistant roofing (Class A rated: tile, metal, composite)
- Enclosed eaves (prevents ember intrusion)
- Ember-resistant vents (1/8-inch mesh or better)
- Tempered or dual-pane windows
- Non-combustible fencing within 5 feet of the home
- Community-wide Firewise USA certification
The exact discount varies by carrier, but early reports show 5% to 15% reductions for full compliance. On a $10,000 annual premium, that is $500 to $1,500 back in your pocket every year.
Want to know if a property meets defensible space standards before you buy? I walk properties with this checklist.
💬 Text Justin for a Property ReviewBuyer Strategy: Get Quotes Before You Offer
The number one mistake LA homebuyers make right now is treating insurance as something you figure out after your offer is accepted. In 2026, that approach can blow up your deal, your budget, or both.
The 5-Step Insurance-First Buying Strategy
Check the Fire Zone Before You Tour
Before you even schedule a showing, look up the property on CAL FIRE's Fire Hazard Severity Zone map. If it is in a Very High Fire Hazard Severity Zone or WUI area, budget accordingly. I check this for every property my clients consider.
Get 3+ Insurance Quotes Before Writing Your Offer
Contact at least one admitted carrier, one surplus lines broker, and the FAIR Plan. You need to know the real annual cost before you commit to a purchase price. An extra $8,000/year in insurance changes what you can afford.
Add an Insurance Contingency to Your Offer
Include a contingency that lets you cancel if insurance exceeds a specific annual cost. Example: "Buyer may cancel if acceptable homeowners insurance cannot be obtained for less than $X per year." Your agent should help structure this language.
Evaluate Defensible Space During Inspection
Have your home inspector (or a wildfire mitigation specialist) assess the property's defensible space compliance. Needed improvements affect both your insurance cost and your post-purchase budget. Factor remediation costs into your negotiations.
Bind Your Policy Immediately After Acceptance
Do not wait until the week before closing to finalize insurance. Bind your policy as soon as your offer is accepted. In the current market, some carriers have 2-3 week processing times. Delays in insurance can delay your close of escrow.
Ready to start your home search with an insurance-first strategy? I guide buyers through this every week.
💬 Text Justin to Get StartedHow LA Compares to Other California Markets
Los Angeles is not the only California market dealing with insurance challenges, but the degree of impact varies significantly by region.
| Metro Area | Fire Risk Level | Avg. Premium | FAIR Plan Use | Carrier Availability |
|---|---|---|---|---|
| Los Angeles (hillside) | Very High | $8K - $15K | Very High | Very Limited |
| Los Angeles (flatland) | Low-Moderate | $2K - $4K | Low | Good |
| San Diego | Moderate-High | $3K - $8K | Moderate | Moderate |
| San Francisco / Bay Area | Low-Moderate | $2K - $5K | Low | Good |
| Sacramento | Low-Moderate | $1.5K - $3.5K | Low | Good |
| Santa Rosa / Wine Country | High-Very High | $5K - $12K | High | Limited |
| Lake Tahoe / Foothills | Very High | $6K - $14K | Very High | Very Limited |
The takeaway: LA's flatland neighborhoods (Central Pasadena, SGV valley floor, Mid-Wilshire, Koreatown) remain well-served by standard carriers. The crisis is concentrated in hillside, canyon, and WUI-adjacent areas. Where you buy within LA matters more than whether you buy in LA at all.
Explore lower-risk neighborhoods: Alhambra | South Pasadena | Monrovia | San Marino
Looking for homes in areas where insurance is still affordable? I will build you a custom search.
💬 Text Me Your Criteria📋 Insurance Decision Cheat Sheet
Save this guide and text me when you are ready to buy. I will walk you through the insurance process step by step.
💬 Save My Number: (213) 262-5092Frequently Asked Questions
Can I get homeowners insurance in Los Angeles in 2026?
Yes, but your options are more limited than they were before 2023. State Farm, Allstate, and Farmers have all reduced new policy writing in California. You can still get coverage through remaining admitted carriers like CSAA, Mercury, and Nationwide, through the FAIR Plan as a last resort, or through the surplus lines (E&S) market. The key is to start shopping for insurance before you make an offer on a home, not after.
What is the California FAIR Plan and how does it work?
The California FAIR Plan is a state-mandated insurer of last resort. It provides basic fire and dwelling coverage when you cannot find insurance on the private market. Coverage caps at $3 million for residential properties. It does not include liability, theft, or water damage, so you will need a separate Difference in Conditions (DIC) policy to fill those gaps. FAIR Plan premiums are significantly higher than standard policies, typically $5,000 to $10,000 per year for a mid-range LA home.
Why did State Farm and Allstate stop writing policies in California?
State Farm announced in May 2023 it would stop writing new homeowners policies in California, citing wildfire risk, rising construction costs, and the regulatory environment that limited rate increases. Allstate had already quietly paused new policies in late 2022. Farmers followed by capping new policies in July 2023. These carriers argued that California's Proposition 103 prevented them from pricing wildfire risk accurately and from using catastrophe modeling in rate-setting.
How much does homeowners insurance cost in Los Angeles in 2026?
Costs vary dramatically depending on your coverage source. Standard admitted carriers charge roughly $2,000 to $4,000 per year for a typical LA home. The FAIR Plan runs $5,000 to $10,000 per year for basic fire coverage only. Surplus lines or excess and surplus (E&S) carriers charge $8,000 to $15,000 or more per year but offer broader coverage than the FAIR Plan. Homes in high-fire-risk hillside zones or Wildland-Urban Interface (WUI) areas pay the highest premiums.
What are surplus lines and how do I get coverage through them?
Surplus lines, also called the excess and surplus (E&S) market, consists of insurers not admitted in California that can write policies when admitted carriers decline coverage. Companies like Lloyd's of London, Scottsdale Insurance, and Lexington Insurance operate in this space. You access them through a licensed surplus lines broker. Premiums run 2 to 5 times higher than standard market rates, but for many LA homeowners in fire-prone areas, surplus lines are the only option besides the FAIR Plan.
How does the insurance crisis affect home values in Los Angeles?
The insurance crisis is putting downward pressure on home values in the hardest-hit areas. Buyers factor $8,000 to $15,000 in annual insurance costs into their purchase calculations, reducing what they can offer. Some lenders are declining loans when buyers cannot secure adequate coverage. Properties in Very High Fire Hazard Severity Zones and WUI areas are seeing longer days on market and more price reductions compared to lower-risk neighborhoods.
What legislative actions has California taken on the insurance crisis?
California has passed several measures. AB 2167 requires insurers to offer discounts for wildfire mitigation and defensible space compliance. SB 1060 strengthened FAIR Plan coverage requirements and consumer protections. The Insurance Commissioner issued a moratorium on policy non-renewals in wildfire-affected zip codes and approved new regulations allowing insurers to use catastrophe modeling in rate-setting for the first time, a major shift from prior Proposition 103 restrictions. These changes aim to bring standard carriers back to the California market.
Should I add an insurance contingency to my home purchase offer?
Yes, absolutely. An insurance contingency allows you to back out of a purchase if you cannot secure acceptable homeowners insurance at a reasonable cost. In the current LA market, this is essential for any property in a hillside area, WUI zone, or neighborhood where FAIR Plan is the only option. Get insurance quotes before making your offer so you know the true cost of ownership. Your real estate agent should help you structure this contingency with specific coverage and cost thresholds.
Related Resources
Insurance Is Now Part of Your Buying Strategy
- Fire zone check on every property before you tour
- Insurance broker referrals for fire-risk properties
- Insurance contingency language built into your offer
- True cost-of-ownership analysis, not just the mortgage
