Overview

• California's new regulation requires home insurers to increase coverage in wildfire-prone areas by 5% every two years until reaching 85% of their statewide market share.
• The reform allows insurers to include reinsurance costs in premiums for the first time, aligning California with practices in other states.
• To prevent excessive consumer costs, reinsurance charges will be capped at an industry standard and reviewed by regulators.
• Insurers unable to meet the mandated coverage requirements will lose the ability to pass reinsurance costs to consumers.
• The changes are part of Insurance Commissioner Ricardo Lara's Sustainable Insurance Strategy, aimed at stabilizing California's insurance market and improving policy availability by mid-2025.