California FAIR Plan Rate Increase: San Fernando Valley
Published on September 3, 2026 by Leegie Parker
Leegie Parker | Real Estate Advisor | DRE 01020534 | Compass | Leegie.com
Quick Answer California's FAIR Plan is raising residential insurance rates by an average of 29.1% starting October 15, 2026, but that number is a statewide average, not what any one homeowner will pay. In San Fernando Valley communities like Tarzana, Encino, Sherman Oaks, Studio City, Woodland Hills, and Calabasas, the real difference comes down to whether a home sits in the flats or climbs into the hills, with hillside and canyon-adjacent properties facing the steepest increases. |
The California FAIR Plan rate increase taking effect October 15, 2026 will raise residential insurance premiums by an average of 29.1% statewide, but in the San Fernando Valley, your address matters more than that headline number. I have watched more friends, neighbors, and clients than I can count get non-renewal letters from their longtime insurance carrier the past few years, then scramble to find any coverage at all, often landing on the FAIR Plan as the only option left. For a flatland home in Sherman Oaks or Encino, that scramble might end in a modest premium. For a hillside home in Woodland Hills or Calabasas sitting in a high fire severity zone, it can mean a monthly housing cost that changes the whole math of owning the property.
The California Department of Insurance approved this rate hike after the FAIR Plan had originally requested an even larger 35.8% increase, and it comes at a moment when Valley homeowners are already leaning on the FAIR Plan more than ever. According to the FAIR Plan's own ZIP-code data, the number of residential policies in force in Tarzana's 91356 ZIP code increased 52% between September 2024 and September 2025. Woodland Hills' 91367 ZIP saw a 70% increase over the same period. This is not an abstract statewide story. It is happening on our streets, and it is starting to show up in how buyers evaluate hillside listings before they ever write an offer.
Here is what every homeowner, buyer, and seller in these neighborhoods should understand before October 15.
In This Post
What Is the California FAIR Plan Rate Increase and When Does It Take Effect?
The California Department of Insurance has approved an average 29.1% rate increase for California FAIR Plan residential policies, effective for new policies and renewals beginning October 15, 2026. The FAIR Plan had originally requested a larger 35.8% average increase, and the approved figure, while lower, is still the largest rate hike in the plan's history.
One detail matters for your own planning. This change does not land on every policyholder the same day. It applies to new and renewal dwelling policies starting October 15, 2026, so if your FAIR Plan policy renews in November or next spring, that is when the new pricing will show up on your bill. Check your own renewal date rather than assuming October 15 affects you directly.
Why Doesn't the 29.1% Average Tell the Whole Story in the Valley?
The 29.1% is a statewide average, and actual pricing is tied far more closely to wildfire risk, elevation, and property characteristics than to a flat percentage. Homeowners in high wildfire-risk locations may see the wildfire portion of their premium roughly double, while some lower-risk FAIR Plan customers could see their rates hold steady or even decline. That range is exactly why a single number in a headline can be misleading if you own property in the Valley.
Think about Sherman Oaks. A house in the flats north of Ventura Boulevard carries a very different wildfire exposure than a home winding up into the hills south of Ventura toward Mulholland. The same divide plays out across every neighborhood I work in:
• Studio City: the flats versus the hills around Laurel Canyon, Fryman Canyon, and the Santa Monica Mountains.
• Encino: the flats north of Ventura Boulevard versus Encino Hills and the neighborhoods approaching Mulholland.
• Tarzana: the flats versus the hills south of Ventura and the properties approaching the Santa Monica Mountains.
• Woodland Hills: the Valley floor versus hillside neighborhoods south of Ventura Boulevard and toward Topanga Canyon.
• Calabasas: much of the community carries considerably more brush and wildland-urban-interface exposure than a typical Valley flats neighborhood.
For today's buyers and homeowners, the familiar rule of location, location, location increasingly applies to insurance as well as property value. Two homes a few blocks apart, in the same ZIP code, can face very different renewal notices this fall.
How Many San Fernando Valley Homeowners Are Already on the FAIR Plan?
The number of residential FAIR Plan policies in force has grown sharply across the Valley over the past year, and the numbers make clear this issue is not theoretical.
Source: California FAIR Plan residential policies in force by ZIP code, September 30, 2024 to September 30, 2025. This is a different snapshot date than the statewide totals cited elsewhere in this post, which reflect June 2026.
Area / ZIP | Policies 9/30/2024 | Policies 9/30/2025 | YoY Increase |
Calabasas – 91302 | 1,922 | 2,642 | 37% |
Woodland Hills – 91364 | 948 | 1,391 | 47% |
Tarzana – 91356 | 802 | 1,223 | 52% |
Studio City – 91604 | 777 | 1,013 | 30% |
Encino – 91436 | 655 | 992 | 51% |
Sherman Oaks – 91423 | 656 | 871 | 33% |
Sherman Oaks – 91403 | 604 | 825 | 37% |
Encino – 91316 | 495 | 758 | 53% |
Woodland Hills – 91367 | 303 | 515 | 70% |
In Woodland Hills' 91367 ZIP code, the number of residential FAIR Plan policies in force increased 70% in one year, rising from 303 policies as of September 30, 2024, to 515 by September 30, 2025. In Tarzana's 91356 ZIP code, residential FAIR Plan policies in force increased 52% over the same period, from 802 to 1,223. Encino's 91436 ZIP was up 51%. Thousands of homeowners across the communities I serve are already relying on the FAIR Plan, which means this rate increase is landing on a base that has already grown dramatically.
Why Are FAIR Plan Rates Increasing Across California?
Several overlapping forces are driving this increase, and understanding them helps explain why the trend is unlikely to reverse quickly.
• Wildfire losses: California has experienced increasingly expensive wildfire disasters, including the Los Angeles fires of January 2025, which drove significant new claims.
• A much larger FAIR Plan: as of June 2026, the FAIR Plan had 696,562 dwelling and commercial policies in force, up 8% since September 2025 and up 157% since September 2022. Total
insurance exposure has reached roughly $768 billion, up 250% since September 2022, and written premium has climbed to about $2.04 billion, up 212% over the same period.
• Higher reconstruction costs: labor and building material costs have risen significantly, so replacing a destroyed home now costs more than it did even a few years ago.
• New wildfire risk pricing tools: California's Sustainable Insurance Strategy now allows insurers to use approved forward-looking catastrophe models, meaning pricing is becoming more sensitive to a property's actual projected wildfire risk rather than historical averages alone.
That last point is precisely why the Valley's hillside-versus-flats distinction matters so much right now.
What Does a FAIR Plan Policy Cover, and Do You Need a DIC Policy Too?
A FAIR Plan policy is primarily basic property and fire coverage. It does not automatically include protections you would expect in a standard homeowners policy, such as liability, theft, or most water-damage coverage. Because of that gap, most FAIR Plan homeowners also carry a Difference in Conditions, or DIC, policy that wraps around the FAIR Plan to fill in the missing protection, and most lenders require this combination before they will approve a mortgage.
That means your true insurance cost on a FAIR Plan property is the FAIR Plan premium plus the DIC premium, not the FAIR Plan number alone. If you are comparing homes or evaluating your own renewal, ask for both figures rather than assuming the FAIR Plan quote tells the whole story.
What Could This Mean for Your Monthly Costs?
Reporting on this rate change suggests roughly half of FAIR Plan policyholders statewide may see increases in the 30% to 50% range, while about a quarter could see decreases, with the highest wildfire-risk homeowners seeing considerably more. A few simple examples show what that can mean in dollars. These are illustrations only, not a prediction for any specific property.
• A homeowner currently paying $4,000 a year with a 30% increase would move to about $5,200.
• A homeowner paying $7,500 a year with a 50% increase would move to about $11,250.
• A homeowner paying $10,000 a year whose premium doubles would move to $20,000 annually.
For buyers, insurance is increasingly a real part of the affordability equation alongside purchase price, mortgage rate, and property taxes. An extra $5,000 a year in insurance works out to roughly $417 a month. An extra $10,000 a year is about $833 a month. Added on top of a mortgage payment, that can genuinely change what a buyer is able to qualify for or comfortable taking on.
How Does This Affect Buying a Hillside Home in the Valley?
I consider insurability part of the due-diligence process on any hillside or canyon-adjacent property today, and I think every buyer should too, well before removing contingencies. Before a buyer gets too far into escrow on a hillside home in Woodland Hills, Calabasas, or the upper reaches of Encino or Tarzana, I want them to know:
• Can this home get conventional insurance, or will it require the FAIR Plan?
• If it needs the FAIR Plan, what is the estimated premium?
• Will a DIC policy also be required, and what does that add?
• What is the realistic combined annual cost?
This year especially, I have seen friends, neighbors, and clients get non-renewal letters from carriers they had been with for years, then scramble to find any coverage at all. Working through those answers early protects a buyer's earnest money and their peace of mind.
How Does This Affect Selling a Hillside Home in the Valley?
Sellers of hillside properties should understand their home's insurance picture before going to market, not after a buyer raises it mid-escrow. I have watched the rising cost of insurance directly affect conversations around hillside listings this year. A buyer who loves the house but learns insurance runs $14,000 or more a year is facing a real affordability objection, and discovering that late in escrow can derail a deal that otherwise would have closed.
I want to be careful here rather than alarmist. There is no evidence that this rate increase has caused San Fernando Valley home values to fall, and a spectacular hillside property can still command a premium for its view, privacy, and location. What I am seeing is that higher insurance costs add another layer to housing affordability, and that increasingly factors into what some buyers are willing or able to pay, particularly when they are comparing similar homes with very different insurance costs. A buyer weighing a home with $4,000 in annual insurance against a comparable home with $15,000 in annual insurance is eventually going to notice that gap, and sellers who get ahead of it with clear information tend to have smoother escrows.
Is There Any Good News?
Yes, and it is worth including rather than treating this as an all-bad story, while still being honest about where things stand. As of July 2026, the California Department of Insurance reported that 11 homeowners insurance groups, including Farmers, Mercury, AAA/Auto Club of Southern California, CSAA, USAA, Liberty Mutual, and Travelers, have committed to remain in California and grow their coverage in wildfire-distressed areas. Mercury alone has committed to more than 38,000 policies over time, and Farmers has committed to marketing coverage to at least 300,000 policyholders in wildfire-distressed areas.
There are also early signs that the flood of homeowners moving onto the FAIR Plan may be slowing. Average monthly new business from October 2025 through June 2026 ran about 25% below the prior fiscal year's monthly average, according to the FAIR Plan. That is encouraging, though it does not mean California's insurance market has fully recovered. The long-term goal behind these reforms is to move homeowners off the FAIR Plan and back into the conventional insurance market, and that shift is still in its early stages.
What Can Homeowners Do to Lower Their FAIR Plan Costs?
Home hardening is not just a safety measure any longer, it can be a financial one. Under the state's wildfire safety framework, qualifying mitigation efforts can reduce the fire portion of a policy's premium. Common hardening steps include:
• Class A fire-rated roofing
• Ember-resistant vents
• Maintained defensible space around the home
• Ongoing vegetation management
Separately, a 2026 analysis by the California Department of Insurance and the National Association of Insurance Commissioners looked at rebuilding in the communities affected by the Palisades and Eaton fires. It found that rebuilding to the IBHS Wildfire Prepared Home standard could reduce projected future wildfire losses in those communities by roughly a third on average. That is a meaningful finding, though it reflects modeling for those specific fire-affected areas rather than a guaranteed discount for every California home.
Frequently Asked Questions
When does the new California FAIR Plan rate take effect for my policy?
The 29.1% average increase applies to new and renewal FAIR Plan dwelling policies beginning October 15, 2026. If your policy renews after that date, the new pricing applies at your next renewal, not automatically on October 15 itself.
Will every FAIR Plan policyholder see the same 29.1% increase?
No. The 29.1% is a statewide average. Homeowners in high wildfire-risk areas may see their wildfire premium roughly double, while some lower-risk policyholders could see their rates hold steady or even decline.
What is a Difference in Conditions (DIC) policy, and do I need one?
A FAIR Plan policy only covers basic fire and named-peril risks, not liability, theft, or most water damage. A DIC policy wraps around the FAIR Plan to fill those gaps, and most lenders require it before approving a mortgage on a FAIR Plan-insured home.
Can I do anything to lower my FAIR Plan premium?
Yes. Fire-hardening steps such as Class A roofing, ember-resistant vents, and maintained defensible space can qualify a property for discounts under the state's wildfire safety framework.
Key Takeaways • California's FAIR Plan is raising residential rates by an average of 29.1% starting October 15, 2026, but the actual impact depends heavily on location and wildfire risk, not on the headline number alone. • The number of residential FAIR Plan policies in force has grown fast across the Valley. Tarzana's 91356 ZIP code is up 52% (802 to 1,223) and Woodland Hills' 91367 ZIP is up 70% (303 to 515) between September 2024 and September 2025. • Hillside and canyon-adjacent homes in Woodland Hills, Calabasas, Encino, Tarzana, Studio City, and Sherman Oaks carry meaningfully more insurance exposure than flatland properties in the same neighborhoods. • A FAIR Plan policy usually needs to be paired with a Difference in Conditions (DIC) policy for full coverage, and lenders typically require both. • Buyers should investigate a hillside property's insurability before removing contingencies, and sellers should understand their home's insurance picture before listing. • Carriers are beginning to re-enter California's wildfire-distressed markets, and home hardening can help offset rising premiums. |
Ready to Talk?
Thinking about buying or selling in the San Fernando Valley or on the Westside of Los Angeles? I'd love to hear from you. Call or text me at 310-739-9202, or email Leegie@Leegie.com. I'll give you a thoughtful, grounded take on where you stand.
Leegie Parker
Real Estate Advisor, Compass
DRE 01020534
310-739-9202 | Leegie@Leegie.com | Leegie.com
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