Homeowner Insurance Savings: Republican Senator Marie Alvarado-Gil on California's Fair Plan

Published Date: 10/18/2025

California’s Insurance Crossroads: Senator Marie Alvarado-Gil on FAIR Plan Reform, Discounts, and the Future of Fire Coverage

California’s homeowners insurance market has become a case study in what happens when risk, regulation, and reality collide. Across the state, families are being priced out of coverage or pushed onto the California FAIR Plan — the state’s insurer of last resort — at rates many can no longer afford.

On The Insurance Hour, host Karl Susman sat down with Senator Marie Alvarado-Gil, one of the few state legislators personally insured through the FAIR Plan, to discuss both the human and policy side of the crisis. The conversation offers a rare, firsthand look at how state leaders view the challenges — and opportunities — of rebuilding a more sustainable insurance system.

Living the FAIR Plan Reality

“I have the honor of being the only member of the state legislature that’s on the FAIR Plan,” Senator Alvarado-Gil began. “So when my constituents talk about the heartaches and frustration with insurance in California, I raise my hand and say, I get it.”

Her story mirrors that of thousands of rural Californians. After moving from the Bay Area to her “forever home” in the mountains, she discovered that affordable traditional insurance was virtually impossible to find.

“At first, my real estate agent described the FAIR Plan as a backup — a product that might cost a bit more but would still make rural living possible,” she explained. “But once I started getting quotes, I realized the numbers didn’t add up. The price kept climbing year after year.”

For many homeowners like her, annual premium increases have become staggering — sometimes thousands of dollars more per year. Deductibles have ballooned from $5,000 to $20,000 just to keep premiums manageable.

“People are paying more than ever for basic fire coverage,” she said, “and the FAIR Plan, which was meant to be temporary, has become permanent for far too many.”

The FAIR Plan’s Expanding Role

As Susman pointed out, “Almost 40 to 50 percent of the FAIR Plan’s business isn’t even in the hills — it’s in the flats.”

That statistic highlights how deep the problem runs. The FAIR Plan was designed for high-risk wildfire zones, not for suburban areas that private insurers once eagerly served. But as major carriers have scaled back, the FAIR Plan’s footprint — and financial exposure — have exploded.

Although technically a nonprofit pool funded by insurers, the FAIR Plan recently warned regulators that it may need rate increases of 60–70 percent to stay solvent. Only a fraction of that was approved, leaving the program in a precarious position.

“The rates are already as high as they are,” Susman observed, “and they’re still inadequate. That’s alarming.”

New Home Hardening Discounts: A Step Forward, But Not Far Enough

One bright spot in early 2024 was the introduction of home hardening discounts, new regulations requiring insurers to reward wildfire risk reduction. The FAIR Plan became the first carrier to have its program approved by the Department of Insurance.

The discounts are divided into two categories:

1. Home improvements — like fire-resistant roofs, vents, and ember-resistant materials.
2. Defensible space actions — clearing brush, trimming trees, and creating fire breaks.

Together, homeowners can qualify for a 14.5% total premium reduction.

“Fourteen and a half percent may not sound like much,” Susman noted, “but compared to private carriers that offer 0.3% for a trimmed bush or 0.7% for a cleared leaf, it’s significant.”

Still, the senator remains cautious. “I’ve spent thousands every year maintaining defensible space and fire safety,” she explained. “That 14% discount doesn’t come close to offsetting what it costs to keep my property safe.”

The FAIR Plan also requires 100% of participating properties to be inspected, a logistical challenge that could create months of delays. Homeowners can receive the discount immediately after applying, but inspections could later revoke it retroactively if criteria aren’t met.

Susman wryly noted, “They’ll be very good about taking that discount back if you don’t qualify.”

Prevention Over Payouts

Both agreed on one key cultural issue: prevention is undervalued.

“If you ask most people, they’d rather have a covered claim than no claim,” Susman said. “But a claim means loss — something bad happened. The fewer claims there are, the lower premiums can be.”

Senator Alvarado-Gil agreed. “We’re investing millions at the state level in grants and incentives for home hardening,” she said. “But we need homeowners to match that commitment. The reward for prevention isn’t just a discount — it’s saving your home, your community, and your investment.”

She has invested heavily in her property: clearing vegetation, adding gravel, and maintaining defensible space even against unmanaged state-owned forestland nearby. But she pointed out the imbalance — homeowners doing everything right can still face higher premiums if surrounding land isn’t maintained.

The Geography of Risk — and Fairness

California’s insurance debate often turns on fairness: should people in wildfire-prone areas pay more?

Alvarado-Gil rejects that logic. “We choose to live where we live,” she said. “No one tells people in the city that they should move because of crime or floods. Why should rural Californians be punished for loving the mountains?”

Susman agreed, noting that risk exists everywhere: fireworks fires in the Central Valley, coastal floods in Capitola, or earthquakes near San Francisco. “Everyone’s got their something,” he said. “The system just isn’t sophisticated enough yet to recognize that.”

Modern insurance models are moving toward granular, property-specific risk assessments, something both believe is essential. “If I’ve cleared my land, hardened my home, and installed a well,” the senator said, “I should pay less than my neighbor who hasn’t.”

Susman added, “That’s where we’re headed — letting data reflect the reality of individual mitigation instead of blanket assumptions.”

A Broken Market, Not Just a Rural Problem

The conversation also touched on the broader insurance freeze. With many carriers halting new business, consumers across the state are struggling to find quotes.

Susman recalled a test his team ran: “Of the 111 companies listed by the Department of Insurance as writing homeowners policies, only six were even willing to quote. That’s how bad it’s gotten.”

The senator called it “unacceptable,” adding that Californians expect the government to ensure basic market functionality. “We have so much intelligence, wealth, and technology in this state,” she said. “We can solve this — we just haven’t had the political will.”

Looking Beyond Fire — The Broader Climate Challenge

Insurance reform in California often centers on wildfires, but Alvarado-Gil emphasized that the issue is all-encompassing.

“In my district alone, we’ve had fires, floods, and snowstorms that shut down entire towns,” she said. “One year, 11 of my 13 counties were under FEMA assistance.”

From mudslides and snowmageddon to coastal erosion and flooding, extreme weather events are now year-round. The senator argues that these challenges can’t be solved piecemeal.

“We all enjoy California — the coast, the mountains, the wine country. But that means we all share responsibility for protecting it,” she said. “The burden can’t fall solely on those who live closest to the risks.”

A Federal Reinsurance Solution?

Susman also introduced a surprising topic: Representative Adam Schiff’s quiet proposal to create a federal catastrophe reinsurance program.

The bill, though stalled, would have consolidated FEMA’s flood insurance, the California FAIR Plan, the Earthquake Authority, and similar regional pools into a national risk-sharing fund. Insurers would “pay to play,” contributing premiums in exchange for a federal backstop during catastrophic events.

Alvarado-Gil found the idea compelling. “We have the intelligence and resources to make this work,” she said. “What we need now is political courage.” She pledged to explore the concept during her team’s next trip to Washington, D.C.

Reforming for the Future

Both agreed that progress is finally happening under California’s Sustainable Insurance Strategy, led by Insurance Commissioner Ricardo Lara and supported by Governor Newsom.

“The ship is slowly turning,” Susman said. “Maybe not as fast as we want, but it’s moving.”

Alvarado-Gil expressed optimism but realism: “We can’t let perfection be the enemy of progress. Even imperfect reform is better than paralysis.”

Her final message summed up the stakes:

“Insurance isn’t just about protecting property. It’s about protecting our communities, our way of life, and the California dream. We owe it to every homeowner — coastal, urban, or mountain — to get this right.”

Key Takeaways

• The California FAIR Plan is expanding far beyond its intended purpose, highlighting the collapse of the private market.
• Home hardening discounts are a step forward but remain modest compared to real mitigation costs.
• The market’s paralysis shows the need for federal reinsurance or state-level stabilization mechanisms.
• True fairness will come only when risk modeling reflects individual mitigation rather than broad ZIP-code zones.
• Reform is underway — but political will and collaboration will determine whether California’s market recovers.