If you’re buying a home in the South Bay, your insurance quote can matter almost as much as your interest rate. California’s home insurance market has been under strain for several years. There are signs of recovery, but buyers who wait until the last week of escrow to shop for coverage can still get an unpleasant surprise.
What’s Happening With Home Insurance in California?
Premiums have climbed sharply. A Stanford white paper released in June 2026 found that average California homeowners premiums rose 84% from the end of 2020 to March 2026. Average deductibles went from about $1,800 to about $2,550 over the same stretch. By 2022, seven of the state’s 12 largest home insurers had cut back on new policies or stopped writing them.
The strain isn’t limited to high fire areas, either. The same research found that in moderate and low wildfire risk zip codes, the FAIR Plan backed new mortgages at twice its overall market share.
Is the Market Getting Better?
There’s real movement. In August 2026, the California Department of Insurance reported that FAIR Plan growth had slowed for the third straight quarter. In September, the Department announced that State Farm and Allstate had both filed to resume writing new homeowners policies. Neither company was open to new business yet, and both filings were still under review.
More options may open up for buyers. Just don’t plan around any one company until it’s actually writing policies for homes like yours.
What Is the FAIR Plan, and When Do Buyers Use It?
The California FAIR Plan is the state’s insurer of last resort. It mainly covers fire, smoke, and wind, so many owners add a separate “difference in conditions” policy for things like theft and liability. That pairing often costs more than a single standard policy.
FAIR Plan rates are rising too. State regulators approved an average 29.1% increase that applies to policies as they renew in late 2026.
You also can’t take over the seller’s FAIR Plan policy. It isn’t assumable, so you’ll need coverage in your own name.
When Should South Bay Buyers Shop for Insurance?
Earlier than most people think. Ideally before you write an offer, and no later than the start of your inspection period. A few steps help:
- Ask the seller who insures the home now and what it costs.
- Get quotes for the specific address, not a ballpark for the neighborhood.
- Work with an independent agent or broker who can check several standard carriers before turning to the FAIR Plan.
- Read the Natural Hazard Disclosure report for the property’s fire zone status.
- Have a firm quote in hand before you remove contingencies.
Your lender will require proof of coverage before closing. A late surprise can delay the deal or force you to renegotiate.
Don’t Forget Earthquake Coverage
Standard homeowners policies in California don’t cover earthquake damage. Earthquake insurance is a separate policy, offered through the California Earthquake Authority and some private insurers. Get a quote and make the decision on purpose rather than by default.
How Berkshire Hathaway HomeServices Helps Buyers Plan Ahead
Our agents can flag insurance questions early, point you to the right disclosures, and help you build enough time into your offer to line up coverage. If you’re looking at homes in the South Bay, call Berkshire Hathaway HomeServices at (310) 373-0021 and we’ll help you plan for the full cost of ownership before you commit.