California FAIR Plan Sees Enrollment Surge, Outpacing Regular Policies Amidst Ongoing Insurance Crisis

California FAIR Plan Sees Significant Enrollment Spike

In a striking development within California's insurance landscape, the California FAIR Plan has reported an unprecedented growth in residential policy enrollment. In the last quarter of 2025 alone, the FAIR Plan witnessed an increase of 21,859 new policies. This rise is particularly notable against the backdrop of the ongoing challenges posed by traditional insurance companies, as six of them have collectively pledged to issue only 8,111 new policies in designated "distressed" areas over the next two years.

Carmen Balber, the executive director of Consumer Watchdog, emphasized the stark contrast, stating, "The FAIR Plan added more policies in the last three months than the Commissioner's strategy will add in the state in the next two years." This statement underscores the prevailing insurance crisis in California, where the need for accessible and affordable coverage remains critical.

The FAIR Plan, known for its high cost and lower benefit policies, serves as a last resort for homeowners unable to secure insurance through standard avenues. Balber highlighted that the continued growth of the FAIR Plan signals the ongoing insurance challenges, ultimately affecting many Californians.

Interestingly, Mercury Insurance, one company not reducing its sales in California, accounted for a significant share, pledging 2,107 new policies as part of this growth. Since 2023, Mercury has expanded its policy offerings in California by over 40,000, illustrating their sustained commitment to the market. However, this growth was soon met with regulatory approval of a $85 million, 6.9% increase in home insurance rates in December. Similar trends were noted with companies like CSAA, which also secured a $75 million rate hike without committing to new sales.

In conclusion, the report from Consumer Watchdog reveals that the upward trajectory of policies within the California FAIR Plan during Q4 2025 reflects the broader ongoing issues within the insurance sector. Companies that have sought significant rate increases have not matched these with proportional policy growth, leading to a situation where many Californians continue to face challenges in securing vital insurance coverage. The pressing need for legislative action is evident as California grapples with its insurance crisis, with calls for reforms to ensure adequate coverage, particularly for homes situated in fire-prone areas.

As this landscape evolves, stakeholders and consumers alike are eager to see comprehensive solutions that not only stabilize but also enhance accessibility within California's insurance framework.