New Report Proposes Reforms to California's Home Insurance Crisis

Recommendations include a state-run wildfire insurance program and stronger enforcement of coverage mandates.

Apr. 8, 2026 at 11:07pm

Got story updates? Submit your updates here. ›

A minimalist illustration using bold geometric shapes and primary colors to conceptually represent a state-run wildfire insurance program as a solution to California's home insurance crisis.A state-backed wildfire insurance program could help stabilize California's home insurance market and provide more affordable coverage options for homeowners.Los Angeles Today

A new report from the California Earthquake Authority has proposed a series of reforms to address the state's home insurance crisis, which has seen insurers raise rates and cancel policies for thousands of homeowners due to the increasing risk of destructive wildfires. The report offers a range of options, from regulatory updates to creating a state-run wildfire insurance program, aimed at encouraging insurers to expand coverage while keeping premiums affordable.

Why it matters

California's home insurance market has been in crisis as insurers have retreated from fire-prone areas, citing 'outdated' regulations and rising wildfire risk. This has left hundreds of thousands of homeowners enrolled in the state's last-resort FAIR Plan, raising concerns about its financial sustainability. The report's recommendations aim to stabilize the insurance market and ensure more Californians have access to affordable coverage.

The details

The report recommends strengthening the California Department of Insurance's authority to enforce coverage mandates, possibly by allowing it to revoke approvals for rate increases if insurers fail to meet their goals. It also calls for requiring insurers to disclose full replacement cost estimates to policyholders and regularly update those estimates. Additionally, the report proposes establishing an expedited rate-approval process for the FAIR Plan to reverse the trend of homeowners opting into the program rather than using it as a last resort.

  • The report was released this week, following a law signed by Gov. Gavin Newsom last year calling for new state strategies to address the home insurance crisis.
  • In November 2026, California voters will elect a new insurance commissioner, who would play a critical role in adopting any of the report's proposals.

The players

California Earthquake Authority

The quasi-public entity behind the report, which was tasked with offering policymakers a wide range of options to address the home insurance crisis.

Tom Welsh

The CEO of the California Earthquake Authority, who said the goal of the report was to balance different interests and trade-offs.

Consumer Watchdog

A Los Angeles-based consumer advocacy group that criticized the report for ignoring solutions it argues are necessary to protect homeowners, such as requiring insurers to cover properties that meet wildfire safety standards.

Ricardo Lara

The California Insurance Commissioner, who is sponsoring a bill to address the problem of underinsurance by requiring accurate rebuilding cost estimates.

Got photos? Submit your photos here. ›

What’s next

The Department of Insurance is continuing to review the report, and it's now up to lawmakers, the governor, and the insurance commissioner to decide whether to pursue the recommended reforms.

The takeaway

The report's proposals aim to stabilize California's home insurance market and ensure more homeowners have access to affordable coverage, but some consumer advocates argue the recommendations don't go far enough to protect policyholders. The upcoming election of a new insurance commissioner will be a key factor in determining if and how the report's reforms are implemented.