07/30/2025
Home insurance prices will continue rising.
That is a message from industry experts, as they gathered to discuss the state’s insurance crisis.
“It’s going to be a higher-price environment. It’s not a joy to say that; that is just the reality,” said Rex Frazier, President of the Personal Insurance Federation of California.
He’s a lobbyist for the insurance industry, representing about three-quarters of all property insurance sold in the state, and spoke Wednesday at the California Insurance Crisis Conference.
At the event, hosted by Capitol Weekly and the UC Student and Policy Center, panelists discussed the state’s homeowners insurance crisis of availability and affordability, which has ballooned over the better part of the past decade—and will continue to get more expensive.
The Golden State’s property insurance market simply cannot continue without major reforms, experts say.
“The home insurance market is in a state of crisis,” reads a new report from Deep Sky, a Canadian carbon removal project developer. “The highest risk areas of California have effectively become uninsurable and will soon become unaffordable. … Without significant policy intervention, these properties will eventually become worthless.”
The report, titled “Wildfires 2025,” shows insurers abandoning homeowners in the highest-risk areas, with over 150,000 households now uninsured in California's most fire-prone regions alone. Home insurance premiums have shot up 42% in those areas.
Proposition 103
Any discussion of property insurance rates in California begins with Proposition 103, which passed in 1988. It required insurance companies to roll back rates by 20% and that any future rate hikes be approved by the state insurance department.
The Personal Insurance Federation of California, which represents property insurance companies, said Prop 103 created “rate disparities” between California and the rest of the United States.
Between 2010 and 2020, California’s average insurance premiums increased by 28.3%, the PIFC said. The rest of the U.S. saw a 34% increase during that time. Colorado, a state with similar historic losses in wildfires, saw its insurance premiums increase by 73.5%.
“The ongoing impacts of climate change on California’s wildlands continue to create critically dry fuel conditions and longer, more severe fire seasons,” the PIFC notes on its website.
Not surprisingly, consumer groups see it differently. State Farm seeks a second 11% rate hike to help it offset wildfire losses. If approved, the average Californian policyholder will be paying $1,015 more for homeowners insurance in 2026 than they did in 2023, according to a new analysis from the Center for Climate Integrity.
Proposition 103
Any discussion of property insurance rates in California begins with Proposition 103, which passed in 1988. It required insurance companies to roll back rates by 20% and that any future rate hikes be approved by the state insurance department.
The Personal Insurance Federation of California, which represents property insurance companies, said Prop 103 created “rate disparities” between California and the rest of the United States.
Between 2010 and 2020, California’s average insurance premiums increased by 28.3%, the PIFC said. The rest of the U.S. saw a 34% increase during that time. Colorado, a state with similar historic losses in wildfires, saw its insurance premiums increase by 73.5%.
“The ongoing impacts of climate change on California’s wildlands continue to create critically dry fuel conditions and longer, more severe fire seasons,” the PIFC notes on its website.
Not surprisingly, consumer groups see it differently. State Farm seeks a second 11% rate hike to help it offset wildfire losses. If approved, the average Californian policyholder will be paying $1,015 more for homeowners insurance in 2026 than they did in 2023, according to a new analysis from the Center for Climate Integrity.
