Mass Non-Renewals Leave Wildfire-Zone Homeowners Scrambling for Coverage

Since 2019, more than one million wildfire insurance policies have been non-renewed in California alone. State Farm dropped coverage for roughly 72,000 homes in 2024, Allstate stopped writing new policies in the state in 2022, and Tokio Marine pulled out entirely in 2024. Homeowners in fire-prone ZIP codes receive a non-renewal letter 75 days before their policy expires and are left to find replacement coverage in a market where fewer and fewer carriers will write policies. This matters because homeowners insurance is not optional for anyone with a mortgage. When a policy is non-renewed, the homeowner must find replacement coverage or risk defaulting on their loan. The replacement options are almost always more expensive, offer less coverage, or both. Many homeowners end up on the FAIR Plan, which provides only basic dwelling coverage and excludes personal property, liability, and additional living expenses. The structural reason this persists is that California's regulatory framework historically prohibited insurers from using forward-looking catastrophe models or factoring reinsurance costs into rate filings, forcing them to price risk based on historical losses that no longer reflect current wildfire reality. Insurers responded rationally by exiting the market rather than writing policies they believed were underpriced for the actual risk. Although the California Department of Insurance began allowing catastrophe modeling in 2025 under the Sustainable Insurance Strategy, the market has not yet stabilized, and the years of regulatory lag have created a backlog of hundreds of thousands of displaced policyholders.