Jane Kim vs. Ben Allen on California Insurance

California’s Home Insurance Crossroads

California homeowners did not wake up one morning to a broken insurance market. The crisis unfolded step by step, as wildfires intensified, claims mounted, and regulators and carriers waged a long, quiet tug-of-war over how much risk the private market could afford to carry. Today, that tug-of-war has spilled into public view; it is shaping the 2026 race for Insurance Commissioner and pushing hundreds of thousands of households onto the California FAIR Plan.

If you live in a wildfire-exposed ZIP code, you have probably seen the impact firsthand: non-renewal notices, shrinking coverage options, and premiums that leap upward at each renewal. For many, the insurer of last resort has become the only insurer willing to write a policy at all, even as an average FAIR Plan rate hike of roughly 30% looms for renewals after October 15, 2026. That is not sustainable for families, for high-value properties, or for the broader housing market.

“In the state of California… home insurance is where we’ve had this battle between an Insurance Commissioner, a Department of Insurance, and insurance companies. And who’s been caught in this battle? It’s the consumers.”

— Mike Tanghe

That consumer includes everyone from first-time buyers to high-net-worth households with primary and secondary homes in the wildland-urban interface.

In this article, we will unpack how California’s home insurance market reached this point, what the upcoming FAIR Plan increase actually means, and how the two leading Insurance Commissioner candidates—Jane Kim and Ben Allen—propose to rebuild a functioning marketplace. Along the way, we will highlight the practical questions homeowners and small business owners should be asking now, rather than waiting for a perfect solution from Sacramento.

How California’s Home Insurance Market Broke

The core of California’s problem is simple to describe and difficult to solve: a growing mismatch between climate-driven catastrophe risk and a regulatory framework designed for a different era. Eight of the largest wildfires in California history have occurred since 2017, generating severe losses and driving up the cost of capital and reinsurance for carriers.

For years, Proposition 103 and subsequent regulatory practices limited how quickly insurers could adapt. Under the 6.9% cap, carriers seeking larger rate increases faced lengthy, often adversarial reviews, and they were barred from using forward-looking catastrophe models or fully incorporating reinsurance costs in their filings. In practice, approvals that should have taken 90 days often stretched to two or three years—and sometimes ended in outright denial.

As Tanghe notes, “Those rules that were set for insurance companies by the Department of Insurance were what caused these companies to say, ‘You know what, we’re leaving.’” When your cost of goods sold—reinsurance—spikes, but your ability to adjust prices is capped, continuing to write business becomes uneconomic.

The result was gradual but decisive:

• Carriers stopped writing new policies in the most exposed territories.
• Underwriting tightened, especially in wildland-urban interface communities and older housing stock without mitigation.
• Long-tenured customers received non-renewal notices after years or decades with the same insurer.

For homeowners, that meant a painful sequence: notice letters, frantic shopping, and, ultimately, turning to the FAIR Plan as a backstop.

The FAIR Plan’s Growth—and Its Limits

The FAIR Plan was never intended to be a dominant player. It was designed as a temporary safety valve for risks the admitted market could not or would not absorb. But as private carriers pulled back, the FAIR Plan’s footprint expanded dramatically, now covering more than 10% of the residential market and over 700,000 policyholders.

That growth comes at a price. The Plan recently received approval for an average residential rate increase just under 30%, with some policyholders facing hikes between 30% and 50%, while a smaller portion will see decreases depending on their risk profile. A homeowner in a high wildfire-risk region might see premiums jump sharply at the first renewal after October 15, 2026; another in a lower-risk area could see smaller changes or even a modest reduction, but the direction of travel for most is clear.

It is also important to remember that FAIR Plan coverage is limited. There is no liability coverage, and many policies provide only bare-bones protection—enough to satisfy a lender, but not necessarily enough to make a homeowner whole after a major loss.

“It’s effectively a piece of paper you’re buying that will satisfy your lender. It’s not going to make you whole in the event of a loss.”

— Mike Tanghe

For high-net-worth households with complex properties or multiple homes, this gap can be especially stark. Filling it often requires layering a separate companion policy for liability and non-catastrophe perils, which further increases the total cost of risk.

What the 30% FAIR Plan Hike Really Means

On the surface, a “30% rate increase” sounds like a simple number. In practice, it is a complex redistribution of cost based on geography, construction type, and wildfire risk scoring. FAIR Plan officials have indicated that the largest component of the increase is tied to the wildfire portion of premiums, meaning homes in high-risk areas will absorb much of the impact.

For some households, especially those already paying elevated FAIR Plan rates plus a separate companion policy, the new premium may strain budgets or force difficult choices about coverage limits and deductibles. A homeowner paying $4,000 annually today could easily see that amount exceed $5,000 at renewal, while still carrying a significant deductible and limited coverage.

This is one reason the FAIR Plan increase has become a political flashpoint. Consumer advocates see it as another burden on households that were already pushed onto the Plan because private carriers withdrew; insurers argue that prices must align more closely with actual catastrophe risk and rising reinsurance costs.

That framing underscores a central tension in California’s approach: should the system strictly prioritize risk-based pricing, or should it spread catastrophe costs more broadly to support vulnerable communities and hard-to-insure regions?

What Changed—and What Still Hasn’t

Under pressure from consumers, insurers, and policymakers, the Department of Insurance began rolling back some of the most restrictive rules in early 2025, including the prohibition on incorporating reinsurance costs and forward-looking wildfire models into rate filings. Regulators also promised faster, more predictable rate review timelines.

Eighteen months later, there are early signs of a thaw. Carriers such as PURE and Travelers have begun re-entering parts of the California homeowners market, cautiously offering quotes in select territories.

“It’s great to see all these companies that are coming back in to have conversations or even offer quotes again… they’re like, ‘Okay, we’re back in the market, we’d like to participate.’”

— Peter Brecht

That does not mean the crisis is over. It does mean that policy choices matter. The next Commissioner will help determine whether California continues down a path of constrained supply and heavy reliance on the FAIR Plan, or whether it reinforces a framework that invites more private capital back into the market over time.

Jane Kim: A Single-Payer Style Public Disaster Model

Against this backdrop, former San Francisco supervisor Jane Kim is running for Insurance Commissioner on an ambitious, highly interventionist platform. Her central idea is to create a state-run, single-payer style disaster insurance program that would provide “natural disaster insurance for all,” funded by a portion of policyholder premiums that private insurers pass along to the state.

In her vision, every homeowner would participate in a unified risk pool for catastrophic perils such as wildfire and flood, with premium contributions scaled to property value and risk. She has also proposed tying insurers’ access to California’s auto market to their willingness to write homeowners coverage and expanding the state’s public auto insurance option.

Kim argues that a public, nonprofit structure would strip out shareholder profit pressure and marketing overhead, allowing the state to invest premium revenue in climate resilience and stronger mitigation incentives. Supporters see that as a bold answer to a market they believe is already failing too many communities.

Critics, including Tanghe, worry that such an approach could crowd out private capital and place even more pressure on a state-backed system that is already strained. In his view, moving toward an even larger FAIR Plan-style structure would be “an absolute disaster,” especially if it further reduces carrier participation and choice for consumers.

Ben Allen: Codes, Land Use, and Market Mechanics

State Senator Ben Allen takes a different tack. His platform leans into mitigation, building codes, and market-oriented reforms designed to make California more insurable, rather than to replace private insurers.

Allen supports allowing carriers to use modern wildfire catastrophe models and to reflect reinsurance costs in their rate filings, bringing California closer to national standards and making it more attractive for capital. At the same time, he emphasizes physical risk reduction: expanding hardening programs, updating building codes, and strengthening coordination between insurers, local governments, and fire agencies.

Tanghe views Allen’s proposals as more feasible and more rooted in how to get the market functioning faster, even if they do not solve every structural issue. From a homeowner’s perspective, Allen’s platform implies a future in which coverage may remain expensive in high-risk areas but becomes more widely available and more closely tied to measurable mitigation efforts.