What LA's Insurance Crisis Actually Means for Homeowners

Homes with a view in LA have historically garnered a significant premium. Over the last couple years, we’ve seen an adjustment in their value due, in part, to insurance availability and cost.

Starting October 15th, 2026 the California FAIR Plan, California's insurer of last resort for homes that can't get a private policy, is raising rates by an average of 29.1%. The cost of home insurance has been steadily rising over the years (premiums are up 84% since 2020 statewide), but this is a wakeup call for a lot of my clients, both buyers and owners.

Where the Increases Are Landing

Roughly half of FAIR Plan policyholders will see increases in the 30–50% range. Hillside parcels, canyon properties, and homes in the highest fire hazard zones will see the steepest jumps. In Los Angeles, this would likely be neighborhoods where you actually stand to have a view; areas like the Hollywood Hills, Mount Washington, Eagle Rock, parts of Silver Lake. The parts of the city where brush clearance and fire truck access are limited.

Interestingly, some FAIR Plan policy holders will actually see their rates go down. The San Fernando Valley is home to many of the lower-fire risk areas, because…well it’s a Valley. However, there are plenty of owners on the FAIR plan in these flat lands. Now that the FAIR Plan is re-rating based on actual exposure, some of these policy holders may see their numbers come down.

Why This Happened

The abridged story is that the January 2025 Palisades and Eaton fires generated an estimated $4 billion in losses for the FAIR Plan, on top of a policy count that had already grown sharply in the years leading up to it, largely due to private carriers exiting wildfire-prone parts of the state. The plan was designed as a temporary, last-resort option. It's now carrying more risk than it was ever built to hold, and this October rate increase is looking to foot the bill.

What This Means If You Own or Are Looking in the Valley

Much of the San Fernando Valley sits in flatter terrain than the hillside communities driving the steepest increases. It’s good news if you own or are buying in Sherman Oaks, Studio City, Valley Village, Valley Glen, Burbank, etc. Your risk profile, and likely your rate trajectory, looks different than a hillside property.

That said, parts of these neighborhoods do climb into the hills, and those properties carry wildfire exposure risk regardless of the zip code they share with the flatlands below. If you're looking at anything above the flats in these neighborhoods, insurance needs to be part of your decision (and importantly, your contingencies).

A Few Action Items if You’re Home Shopping:

First and foremost, consider how much the view is worth to you. If you’re looking at hillside homes because you think the view “is what everyone wants”…think again. Is the view important to the way you live, and your enjoyment of the home? If not, give the flats a consideration.
Keep your insurance contingency. On hillside or canyon properties especially, make sure you are shopping around quotes from day one, as they may carry a very high premium, or result in outright denial from a private carrier. What you think you can afford may change significantly with the monthly insurance premium cost.
Ask what coverage a seller currently has and whether it's private or FAIR Plan. This will tell you something about how insurers are handling that specific property.

If you own:

It’s worth shopping around your current policy. The market is shifting month to month right now as carriers re-enter and adjust their underwriting.

The Bottom Line

Insurance used to be a formality you handled during escrow without much thought. Today, it's a primary affordability pillar alongside your down payment and your mortgage. Consider your options carefully as you start your search.

If you want a referral to an insurance broker who understands wildfire scoring and FAIR Plan alternatives for a specific property, reach out and I'll send you a couple of names.