California's insurer of last resort grew five-fold — and the bill is landing on everyone's premium

The California FAIR Plan was created in 1968 as a small, state-mandated backstop: fire insurance of last resort for the relatively few homes private insurers wouldn't touch.▸ For most of its history it stayed small. Then wildfire risk stopped being a niche problem, private insurers started leaving whole ZIP codes, and the "last resort" became the only resort for an entire, and growing, share of the state.

Insurers of last resort are supposed to be small and boring: a backstop that rarely gets tested.▸ When the Palisades and Eaton fires burned through Los Angeles in January 2025 — destroying more than 16,000 structures (Cal OES) and causing an estimated $250–275 billion in total economic damage (AccuWeather), among the costliest disasters in U.S. history — they tested it hard. The FAIR Plan alone absorbed an estimated $4 billion in losses (FAIR Plan, Feb. 2025), more than its reserves could cover. State regulators approved a $1 billion assessment on California's private insurers to close the gap (CDI Order No. 2025-1) — by far the largest in the plan's history (CDI press release).

The 2025 assessment is nearly seven times larger than any before it — and under a law passed after the fires, insurers can recoup up to half of what they're assessed by surcharging their own policyholders statewide (CDI Bulletin 2025-4).▸ That means Californians with ordinary private homeowners insurance, who never held a FAIR Plan policy, are now paying part of the FAIR Plan's wildfire bill through their own premiums. The FAIR Plan is also raising its own rates: regulators approved a 29.1% average statewide increase (down from the 36% originally requested), effective October 15, 2026 (California Department of Insurance) — though "average" hides a lot: about half of policyholders will see 30–50% increases, a quarter will see cuts (some as steep as 80%, for those who harden their homes against fire), and the rest will see anything from a modest bump to a 200% spike.

None of this happened because the FAIR Plan went looking for more customers.▸ It happened because private insurers stopped writing policies in fire-exposed areas, and homeowners had nowhere else to go.

In 2019, the FAIR Plan covered 124,000 properties — a rounding error in a state with roughly 14 million housing units.▸ By March 2025 that had grown to 573,739, up 139% in just three and a half years (FAIR Plan). By December 2025 it had passed 645,000. Total exposure — the dollar value of everything the plan is on the hook to rebuild — grew even faster than the policy count, up 424% since 2020 to $603 billion (FAIR Plan, Key Statistics & Data), because the properties landing on the FAIR Plan skew toward the highest-risk, highest-value homes private insurers rejected first.

Dollar and policy-count figures reflect the most recent published FAIR Plan data as of the periods noted; the Plan reports updated totals regularly and current figures may differ. Insured-loss and total-damage estimates for the January 2025 fires vary by catastrophe modeler and are presented as ranges.