- More than 1 in 17 new California home loans used the California FAIR Plan in Q1 2026, showing how deeply the state’s insurer of last resort has moved into mortgage-backed home purchases.
- FAIR Plan use has declined from its Q1 2025 peak of 8.1%, but the 5.6% share still signals limited private-market capacity, especially after insurers pulled back from new California homeowners policies.
- Homeowners seeking broader protection face higher costs: about 40% of sampled FAIR Plan customers also carry an additional policy, paying roughly $2,000 more per year than those relying only on the FAIR Plan.
More than 1 in 17 new California home loans now use the California FAIR Plan, the state’s insurer of last resort, as primary coverage. The figure points to a homeowners insurance market still under strain, even after a pullback from last year’s peak.
A Stanford University Climate & Energy Policy Program report examined California’s homeowners insurance market, wildfire exposure and the FAIR Plan’s growing presence in mortgage originations.
Researchers found that 5.6% of first-quarter 2026 mortgage originations for owner-occupied single-family homes used the FAIR Plan. Co-author Michael Wara reported the more than 1 in 17 figure, and two other authors confirmed it in a June interview.
The FAIR Plan provides basic property insurance for homeowners who lack private-market options. Its policy count has grown sharply in recent years, which researchers treat as a signal of California’s insurability crisis.
The 5.6% share still marks a decline from the recent peak. In the first quarter of 2025, 8.1% of mortgage originations for single-family homes used the FAIR Plan as the primary insurer.
One likely factor: insurers had pulled back from writing new California homeowners policies several years earlier. State Farm, for example, said in 2023 that it would stop accepting new homeowners insurance applications in California.
The report also puts numbers on the cost Californians face when they seek broader protection. About 40% of FAIR Plan customers in the researchers’ sample also carry an additional policy.
The combination costs those policyholders an average of $2,000 more in annual premiums than coverage through the FAIR Plan alone.
The California FAIR Plan now appears to serve two different markets. One sits in high-fire-risk areas. The other sits in lower-fire-risk areas where insurance availability has still tightened.
Researchers found that, as recently as 2016, most FAIR Plan customers lived in areas with lower premiums, most likely urban neighborhoods with little or no wildfire risk. Since then, growth has come from high-risk areas. Since 2023, the FAIR Plan has also spread across more of California as homeowners face fewer private-market options.
The FAIR Plan said in January that it ranks among California’s largest residential property insurers.
According to Stanford researchers, this shift changes the role of the FAIR Plan in the homeowners insurance market. It no longer functions only as a temporary fallback for hard-to-insure properties.
It now affects homeownership and the broader real estate market, because buyers need valid insurance coverage to close many mortgage-backed purchases.
Public concern has moved in the same direction. In 2025, the Public Policy Institute of California found that 60% of Californians felt very concerned that climate-related risks would make home insurance more expensive. A similar share said they felt very concerned about losing access to home insurance because of those risks.