If you live in California, you’ve likely watched your homeowners insurance premium climb faster than almost any other household expense. Since 2018, statewide rates have risen more than 43%, with far steeper increases in many wildfire-prone communities. For thousands of homeowners, the problem isn’t just cost — it’s availability, as major insurers pull back or refuse new policies across large parts of the state.
In a recent CBS/KCAL report, consumer reporter Christine Lazar examined the crisis with insurance expert Karl Susman of The Insurance Hour, offering practical strategies for homeowners trying to protect both their property and their budget in an increasingly hostile insurance market.
A Homeowners Insurance Market Under Extreme Pressure
For West Hills homeowner Gaurav Barjuaj, the shock came in the form of a 200% premium increase — despite his 1,600-square-foot home not being near a brush-filled hillside or steep terrain.
“It’s not in a dangerous area,” he said, “but our homeowners insurance just increased more than 200%.”
Stories like his are becoming common. In some communities, homeowners who once paid $1,500 to $2,000 annually now face premiums of $5,000 to $6,000. In the highest-risk zones, costs can exceed $30,000 to $40,000 per year. Susman summed it up bluntly: many Californians are now paying more for insurance than for property taxes.
At the same time, shopping for alternatives has become nearly impossible. As insurers restrict coverage by ZIP code and fire territory, homeowners are left with fewer options and minimal price competition.
Why Homeowners Insurance Is So Hard to Find in California
Several factors are converging to drive the crisis:
- Wildfire losses that have cost insurers billions over the past decade
- Soaring rebuild costs due to labor shortages and construction inflation
- Regulatory delays under Proposition 103 that slow rate adjustments
- Escalating reinsurance costs as global risk increases
Faced with rising losses and limited pricing flexibility, many insurers have paused new business or exited the state altogether. This has pushed a growing number of homeowners into the California FAIR Plan, which offers limited coverage at significantly higher premiums.
Tip 1: Raise Your Deductible to Cut Your Premium
Susman’s most immediate cost-saving strategy is increasing your deductible.
“Don’t just go from $500 to $1,000,” he advised. “Look at $5,000 or even $10,000 if you can.”
Higher deductibles can reduce premiums by 20% or more. Since homeowners insurance is meant for catastrophic losses, the deductible becomes far less significant in the event of a total fire loss.
“If your home burns to the ground, $10,000 isn’t going to make or break your ability to rebuild,” Susman explained.
Tip 2: Reevaluate Your Coverage Limits
Many homeowners are unknowingly over-insured in certain policy categories, particularly personal property coverage. Insurers typically set this at 50% to 70% of your dwelling limit — often far more than many homeowners actually need.
“If you don’t own that much personal property, ask your carrier to lower it,” Susman suggested.
The same review applies to Loss of Use coverage, which pays for temporary living expenses. If you could stay with friends or family after a loss, you may not need the default high limits. Tailoring these coverages can significantly reduce premiums without sacrificing essential protection.
Tip 3: Avoid Filing Small Claims
Every claim you file stays on your record and can lead to higher premiums or even policy non-renewal.
“Every claim has consequences,” Susman warned.
Calabasas homeowner Eric Brooks learned this firsthand after being dropped twice by insurers. He eventually secured coverage through Lloyd’s of London — but at triple his previous premium. Now, even with an active leak in his home, he refuses to file a claim out of fear of losing coverage again.
This increasingly common dilemma has left homeowners paying more for insurance while being afraid to use it.
Tip 4: Stay Proactive with Fire Hardening
Susman believes meaningful relief could come from regulatory reforms being advanced by Insurance Commissioner Ricardo Lara under the Sustainable Insurance Strategy.
Once implemented, insurers would be allowed to price risk at the individual property level instead of relying primarily on ZIP codes. That means homeowners who invest in mitigation — new roofs, cleared vegetation, ember-resistant vents, and defensible space — could finally see lower premiums and improved eligibility.
“You’ll be able to save money based on what you actually do to your home,” Susman said, instead of being lumped into a high-risk area with no distinction.
Tip 5: Monitor New Legislative Relief Efforts
Lawmakers are also exploring financial relief for homeowners. One proposal, AB 1867, would allow Californians to deduct the full cost of their homeowners insurance premiums from their state income taxes.
If enacted, it would treat insurance like mortgage interest or property taxes — a necessary cost of homeownership — and provide immediate relief to families now paying thousands more per year just to remain insured.
Why California’s Insurance Crisis Is Different From Other States
While insurance prices are rising nationwide, California’s situation is uniquely severe due to:
- Urban development surrounded by wildfire-prone terrain
- Strict consumer-protection laws that slow premium adjustments
- High construction and labor costs that inflate claim severity
- Litigation exposure that increases carrier risk
Ironically, many California homeowners still pay below the national average — but only if they can find coverage at all.
Tip 6: Work With an Independent Insurance Broker
In today’s market, independent brokers are essential. Unlike captive agents who represent one company, independent brokers can access multiple carriers, specialty insurers, and surplus-line markets.
They can also structure layered coverage by combining FAIR Plan fire insurance with separate wraparound policies that add theft, liability, and water damage protection.
“A good broker doesn’t save you money with magic discounts,” Susman said. “They save you money by tailoring coverage correctly.”
A Market at a Regulatory Crossroads
California’s Department of Insurance has long been one of the most consumer-protective in the nation. Yet strict oversight has also slowed insurers’ ability to quickly adjust to modern wildfire risk. Many companies now prefer to withdraw rather than absorb prolonged underwriting losses.
Commissioner Lara’s office is actively working to modernize the system, with a focus on rewarding home hardening and restoring private-market participation. According to Lazar, these reforms may finally realign coverage availability with actual mitigation efforts.
Final Thoughts: Smart Strategies in a Tough Market
For now, California homeowners remain caught in a painful paradox — paying more for less protection and afraid to use the insurance they still have. While broader reforms move through Sacramento, Susman’s guidance remains clear:
- Review your policy every year
- Adjust deductibles and coverage limits to your real needs
- Document all mitigation work
- Work with a trusted independent broker
- Avoid unnecessary claims
Until systemic reform takes hold, informed decisions and proactive planning remain the strongest defenses in a market still struggling to rebalance.
Because while the cost of living in California continues to rise, the financial protection insurance provides when catastrophe strikes remains — even now — one of the most critical investments a homeowner can make.
