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California makes move to stabilize insurance market amid growing wildfire risk

Insurers must write polices for at least 85% of their statewide market share.

By Joe Toppe | January 06, 2025 at 02:30 PM
Wildfire in California.

In an attempt to stabilize California’s insurance market and protect carriers from catastrophic wildfire claims, the state recently issued a regulation to expand coverage access for homeowners in higher-risk areas.

According to the California Department of Insurance, carriers must increase coverage in wildfire-prone regions, ensuring they write policies for at least 85% of their statewide market share, with annual increases until the threshold is met. The department will limit consumer costs by establishing an industry standard for reinsurance and capping the amount of reinsurance costs that can be charged to consumers. Companies spending more than the industry standard cannot pass these costs onto their policyholders.

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