Is California's FAIR Plan Finally Loosening Its Grip? What Santa Cruz County Owners Should Know

Between July and September 2026, California's FAIR Plan added only 2,200 new policies statewide, its slowest growth since 2022. That compares with 12,406 new policies added in the previous quarter. The California Department of Insurance says this signals progress, but it is not a guarantee that any specific home can leave the FAIR Plan. Here is what is real, and what to do next if you own, buy or sell in the Santa Cruz Mountains.

Is It Getting Easier to Get Home Insurance in California?

According to the regulator, the market is moving in the right direction. The California Department of Insurance reported on October 29, 2026 that the FAIR Plan's slowed growth reflects reforms designed to expand traditional market options and reduce reliance on the state's insurer of last resort.

CDI says insurer filings under review have dropped to their lowest level in decades, with faster review timelines. The Department also says 12 homeowners insurance companies, including seven of the ten largest, have committed to staying and growing in California. The list CDI released on July 23, 2026 named Farmers, Mercury, CSAA, USAA, Liberty Mutual, Travelers, Pacific Specialty, Auto Club of Southern California, California Casualty, Horace Mann, and new entrant MS Transverse. Liberty Mutual has asked to expand coverage in wildfire-distressed areas, and PURE plans to look at high-value homes currently on the non-admitted market and the FAIR Plan.

Commissioner Ricardo Lara said: "We are seeing real measurable progress toward a stable California insurance market that meets consumers' coverage needs." That is the Department's characterization of its own reforms. It is not a promise about what any individual property will qualify for.

Worth noting alongside the good news: FAIR Plan policies that started or renewed on or after October 15, 2026 carry a 29.1% average increase, with higher-risk homes generally paying more. A slower-growing FAIR Plan and a less expensive FAIR Plan are not the same thing, at least not yet.

Why This Matters Specifically in Santa Cruz County

After the 2020 CZU Fire burned more than 86,000 acres across Santa Cruz and San Mateo counties, many residents faced rising premiums, non-renewals, and deeper reliance on the FAIR Plan. If you own in Bonny Doon, Boulder Creek, Felton, Scotts Valley, Corralitos or the Aptos hills, you already know this story.

What Is the FAIR Plan, and Do I Need a DIC Policy Too?

The FAIR Plan is California's insurer of last resort. It provides fire coverage, which is meaningful, but it does not cover everything a standard homeowners policy would. Many owners pair it with a separate "difference in conditions" policy, commonly called a DIC, which can cover things like liability, theft, and water damage. The right combination depends on your property and your situation. Ask a licensed agent or broker what makes sense for your specific coverage needs. More information on residential insurance basics is available through the California Department of Insurance consumer resources page.

How Do I Get Off the California FAIR Plan?

The FAIR Plan itself encourages placing risks back in the standard market when that becomes possible. CDI says traditional options are expanding. But whether a specific home qualifies depends on the property, its risk profile, its hardening improvements, and which insurers are writing in that area. Work with a licensed agent or broker, and do not assume the statewide trend automatically applies to your address.

What Discounts Does the FAIR Plan Offer for Wildfire Hardening?

This is one area where Santa Cruz County homeowners have a concrete opportunity right now. According to the Santa Cruz County OR3 FAIR Plan Wildfire Hardening Discounts one-pager, qualifying homeowners may be eligible for up to 16.4% off the wildfire portion of a FAIR Plan Dwelling Fire premium. That is not 16.4% off the total bill. It applies to the wildfire portion of the premium.

Discount categories include:

• Clearing vegetation under decks and within 5 feet of the home
• Noncombustible materials within 5 feet, including fences and gates
• Sheds placed 30 or more feet away from the home
• Defensible space compliance
• Class A fire rated roof
• Enclosed eaves
• Ember and fire resistant vents
• Multi-pane windows or shutters
• 6 inches of noncombustible material at the base of exterior walls
• A completion discount for completing all ten hardening actions
• A community discount for being in a Fire Risk Reduction Community and/or a Firewise USA site

Does Santa Cruz County's Fire Risk Reduction Community Designation Help?

It can. Santa Cruz County secured a Fire Risk Reduction Community designation from the state Board of Forestry and Fire Protection, effective July 1, 2026. As reported by Lookout Santa Cruz, this can help qualifying homeowners, particularly those on the FAIR Plan, access wildfire insurance discounts. It is not automatic for every property. Ask your licensed agent or broker whether the designation applies to your policy.

Should Buyers Get an Insurance Quote Before Making an Offer in the Santa Cruz Mountains?

Yes, and the earlier the better. Insurance quotes now shape offers and escrow timelines in higher fire risk areas. In communities like Bonny Doon, Boulder Creek, Felton, Scotts Valley, the Aptos hills, and Corralitos, buyers who wait until late in escrow to sort out insurance may find themselves making decisions under pressure. Know what coverage costs and what is available before you remove contingencies. Sellers in those same areas should expect insurance questions early in the process and be prepared to speak to what they know about the property's insurability.

FAQ

Did the FAIR Plan shrink in 2026?

Growth slowed sharply, but the FAIR Plan did not shrink. It added 2,200 new policies from July through September 2026, compared with 12,406 in the prior quarter. That is a significant deceleration, not a reversal.

Is Santa Cruz County still affected by wildfire insurance issues?

Yes. Since the 2020 CZU Fire, many residents in mountain and rural areas have faced higher premiums, non-renewals, and greater reliance on the FAIR Plan. The statewide slowdown in FAIR Plan growth is a signal worth watching, but it does not resolve every local situation.

Can I definitely leave the FAIR Plan now?

No guarantee. CDI says traditional options are expanding statewide, but each property must be reviewed individually. Ask a licensed agent or broker what is available for your specific home.

Are there FAIR Plan wildfire discounts available in Santa Cruz County?

Yes. Qualifying homeowners may be eligible for discounts of up to 16.4% off the wildfire portion of a FAIR Plan Dwelling Fire premium through hardening upgrades and through the county's Fire Risk Reduction Community designation. Ask your agent whether your property qualifies.

What should sellers do before listing a home in the hills?

Be ready for insurance questions early. Buyers in higher fire risk areas may need to get quotes before they feel confident removing contingencies. Knowing what your property's insurance situation looks like, and being able to speak to it, can make a real difference in how smoothly a transaction moves.

Sirrom Alizem, REALTOR
eXp Realty Nor Cal Inc
DRE #02137532
(650) 695-1919
sirrom@realtywithsirrom.com
www.realtywithsirrom.com

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