Homeowners insurance is harder to get in Orange County than it used to be, and it is not just a hillside problem anymore. From Anaheim Hills and the canyons of Silverado and Trabuco to the hills above Laguna Beach and Dana Point, many homes sit close enough to wildland that insurers rate them as high fire risk. Over the last few years, several large carriers stopped writing new policies in high risk areas across California, and some Orange County homeowners got non-renewal notices even though their home had never had a claim.
Why did it get this hard? A few very expensive fire seasons pushed insurers to rethink where they would write new business. State Farm non-renewed roughly 72,000 California policies in 2024, and Allstate has paused new homeowners business in the state since 2022. When the big carriers pull back, the homes they leave behind end up on the California FAIR Plan, the state's insurer of last resort. By June 30, 2026, the FAIR Plan had about 696,562 policies in force, up roughly 250 percent in exposure since September 2022.
The good news for 2026 is that the market is slowly getting better. Under California's Sustainable Insurance Strategy, insurers can use forward looking wildfire models and reinsurance costs in their rates, but in exchange they must write more policies in wildfire distressed areas. As of July 23, 2026, the California Department of Insurance said 11 homeowners insurance groups had committed to grow in the state, including Farmers, Mercury, CSAA, Travelers, and AAA. Farmers lifted its monthly cap on new California policies in late 2025, and Travelers committed to expand in April 2026. The FAIR Plan's own numbers point the same way. Its growth slowed to about 16,000 new residential policies in the first quarter of 2026, down from 35,000 to 50,000 per quarter through much of 2024 and 2025, and about 24,000 policies left the FAIR Plan in April and May 2026, according to the Department of Insurance in August 2026. That does not mean every hillside home in Orange County can get a cheap standard policy tomorrow, but buyers today have more options than they did in 2024 and 2025.
If a regular carrier will not write your home, the common path is the California FAIR Plan paired with a Difference in Conditions policy, often called a DIC or wraparound policy. The FAIR Plan covers fire only, with a dwelling limit of $3 million, and the DIC policy fills in what the FAIR Plan leaves out, like liability, theft, and water damage. It usually costs more than a single standard policy, and the FAIR Plan itself got more expensive this fall, with an average rate increase of 29.1 percent taking effect October 15, 2026. That is one more reason to get real quotes during escrow, not after. Remember too that standard homeowners insurance does not cover earthquakes, so earthquake coverage through the California Earthquake Authority or a private carrier is a separate decision.
What does it cost? For a standard home in a non-wildfire ZIP code, statewide analyses put the typical premium at roughly $1,400 to $2,400 a year in 2026. In wildfire exposed ZIP codes, quotes often run $5,000 to $25,000 a year or more, usually as a FAIR Plan plus DIC stack. Those are ranges to set expectations, not quotes. Your actual price depends on your home's wildfire score, rebuild cost, roof type, distance to a fire station and hydrant, and claims history.
There are concrete steps that help. California's Safer from Wildfires rules, in effect since October 2022, require insurers that price for wildfire risk to offer discounts for home hardening work. That includes a Class A fire rated roof, ember resistant vents, five feet of non-burnable space around the home, and cleared defensible space. On the FAIR Plan, completing all twelve qualifying measures can earn up to 16.4 percent off the wildfire portion of a dwelling fire premium for policies dated November 15, 2025 or later. Keep photos and receipts of every upgrade, because your insurer or agent may ask for proof, and ask your insurer which measures earn a discount before you spend the money.
My advice to buyers is simple. Never wait until the last week of escrow to shop for insurance in Orange County. I tell my clients to call an independent insurance broker who works with multiple carriers as soon as their offer is accepted, so there are no surprises. For sellers, having your insurance history, roof age, and any home hardening records ready makes your home easier for the next buyer to insure, which helps it sell. If you want the names of local insurance brokers who know Orange County well, reach out and I will share the ones my clients have had good experiences with.
Josh Alexander
The Brokeredge
Your Local Orange County Real Estate Agent
DRE#:01974435
714-366-2186
