California Gov. Gavin Newsom has signed several bills aimed at reforming the state’s Fair Access to Insurance Requirements (FAIR) Plan, introducing new financing options and expanding coverage to manufactured homes.
Newsom said the state is taking steps to strengthen its insurance market in response to climate-related fire risks.
“The kinds of climate-fueled firestorms like we saw in January will only continue to worsen over time,” he said. “That’s why we’re taking action now to continue strengthening California’s insurance market to be more resilient in the face of the climate crisis.”
Assembly Bill 226, introduced by Assemblymember Lisa Calderon, authorizes the FAIR Plan to secure additional capacity through bonds or a line of credit. Calderon said this approach will help the FAIR Plan distribute costs over time and avoid sudden assessments that could result in premium increases.
Calderon also sponsored AB 234, which designates the Speaker of the Assembly and the chairperson of the Senate Committee on Rules as nonvoting, ex officio members of the FAIR Plan’s governing committee. The legislation permits these lawmakers to appoint representatives to serve in their place.
Assembly Bill 290 requires the FAIR Plan to implement an automatic payment system for premiums and establishes a grace period for policyholders to pay outstanding premium installment payments. The bill also bars the cancellation or nonrenewal of coverage for failure to enroll in automatic payments.
Another measure, AB 1, instructs the California Department of Insurance to review, every five years, whether to update regulations to include additional building-hardening measures for property-level and community mitigation programs.
Senate Bill 525, sponsored by Senate Minority Leader Brian Jones, mandates that the FAIR Plan provide insurance for manufactured and mobile homes under the same terms and conditions as basic property coverage for other residential dwellings, including full replacement coverage.
Jones noted that prior to SB 525, no insurer in California, including the FAIR Plan, offered full-replacement coverage for manufactured and mobile homes. “There’s over 500,000 mobile homes in California and I’m just not comfortable leaving that many people out to dry when the worst happens,” he said.
Insurance Commissioner Ricardo Lara described the legislative package as an important move to stabilize the insurance market and increase transparency.
"As we tackle availability concerns and ensure that insurance companies provide consumers with policies in the traditional market as mandated by my new regulations, the FAIR Plan must offer essential support to its customers,” Lara said.
The FAIR Plan recently proposed an average rate hike of 35.8% for home insurance, which, if approved, would be its largest in at least seven years. About half of policyholders could see increases between 40% and 55%, while some may experience decreases up to 78%.
A small number of policyholders could face increases exceeding 300%. The new rates are expected to take effect after April 1 at renewal.
Wildfire risk remains the primary factor driving these proposed changes, with homeowners in high-risk areas such as Sonoma County and the Sierra Nevada foothills likely to see the largest increases. Those in lower-risk regions, like the Central Valley, may see lower rates.
This adjustment comes as the FAIR Plan has seen its policyholder base more than double since 2021, reaching 591,000 in summer 2025. The program and its participating insurers have cited the financial strain of this rapid growth as a key reason for the proposed rate changes
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