Say you've been with the same insurance carrier for 20 years. Never missed a payment. Never filed a claim. When renewal notices arrive, you sign them and move on.

So you naturally assume that when you buy a new home, the same carrier will simply write a policy on it too, the same way they always have.

They may not.

Many longtime customers are finding out the hard way that their carrier won't follow them to their new home. It's one of the more disorienting surprises in the home buying process.

More than half of California's insurance carriers have pulled out of the state entirely, or sharply curtailed writing new homeowners policies. Loyalty doesn't count here — a new home is treated as new business.

This isn't just a California story, either. A first-of-its-kind national analysis from the National Association of Insurance Commissioners found that insurer-initiated non-renewals became roughly 2 to 3 times more common between 2018 and 2024, depending on region. In the West, which includes California, that rate more than tripled.

Why Premiums Are Climbing

For the carriers still writing new business in California, premiums have climbed sharply. First, the cost of materials and labor to rebuild or repair a home has surged — up more than 40% in San Diego over the past 5 years. Second — and this is the bigger factor — wildfire risk: the January 2025 Los Angeles fires alone produced tens of billions of dollars in insured losses, and insurers have gotten far more selective about which homes they'll cover.

The numbers tell the story. Statewide, premiums rose 41% between 2020 and 2024. Here in San Diego, in 2025, the jump was 27% year-over-year — one of the biggest increases of any metro in the country.

The One Cost With No Ceiling

Here's what makes insurance different from every other line item in your monthly payment. Your mortgage rate, once locked, is fixed unless you refinance — and even if you have an adjustable-rate mortgage, any changes follow a set schedule and are capped by your loan terms, not decided fresh each year.

Property taxes are capped by law — under Proposition 13, the maximum increase is 2% a year. Even HOA dues have limits: California law caps regular assessment increases at 20% annually without a membership vote. Insurance has no such ceiling: if the state approves a rate hike of 10%, 20%, or 30%, it happens — no vote, no cap, no individual recourse.

The FAIR Plan — Your Last Resort

If you're non-renewed and can't find a private carrier to underwrite a policy, the California FAIR Plan is your last resort. It only covers fire, lightning, smoke, and internal explosion, at roughly twice the cost of a standard policy.

To fill in the gaps, you'll need a second policy layered on top — a Difference in Conditions, or DIC, policy — which typically covers liability, theft, vandalism, water damage, and loss of use. Together, a FAIR Plan and DIC policy commonly cost 2 to 3 times what a standard policy costs, while still providing less coverage.

And the FAIR Plan is about to get more expensive: the state approved an average 29.1% rate increase, effective October 15, 2026 — the largest increase in the plan's history. That average hides a wide range: steeper jumps for higher-risk homes, possible decreases for lower-risk ones.

Why This Matters Before You Buy

This is exactly why insurance needs to be one of the first things you look into when buying a home — before you fall in love with the house — not after. And even once your offer is accepted, you may want to reconfirm the actual cost to insure the property — quotes may be time-sensitive, and if escrow runs long, the number you started with might not be the number you close with.

More and more San Diego County buyers are experiencing this firsthand — in 2025, an estimated 16% to 18% of California real estate transactions fell through over the affordability of insuring the property.

Signs the Market Is Turning

There are real, early signs the market is starting to turn. Under the state's Sustainable Insurance Strategy, a few major carriers have committed to expanding coverage in California again.

Farmers Insurance — the state's second-largest home insurer — has committed to writing new policies for at least 300,000 homeowners in wildfire-distressed areas. Mercury was among the first to receive approval under the new framework, and Travelers announced plans this year to expand its California homeowners offerings as well.

Meanwhile, FAIR Plan growth has slowed dramatically — from 35,000 to 50,000 new policies added every quarter in 2024 and 2025, to about 16,000 in the first quarter of 2026. The state's own insurance regulators are calling that slowdown an early sign of stabilization.

None of this means the crisis is over. But for North County buyers and existing homeowners, it does mean the direction is starting to shift, and more competition eventually means more options.

For now, insurance deserves a hard, honest look before you make an offer. If you're buying in Carlsbad, Encinitas, Oceanside, or elsewhere in San Diego County, talk to your insurance agent or broker early.

And if you already own your home and have received a non-renewal notice, don't wait to start shopping for a new policy — talk to your insurance agent or broker today.

Frequently Asked Questions

Why is homeowners insurance so hard to get in California?

More than half of California's carriers pulled out or sharply limited new policies over the past several years. However, that's beginning to ease, with a few major carriers having returned.

Why aren't my insurance premiums capped?

Property taxes and HOA dues are capped by law, but insurance isn't — the state can approve whatever rate increase it decides on, with no vote and no individual recourse.

What is the California FAIR Plan?

The state's insurer of last resort for homes that can't get private coverage. It only covers fire, lightning, smoke, and explosion, at roughly twice the cost of a standard policy — and most homeowners need a second policy layered on top for full coverage.