The Wildfire Insurance Crisis: What Homeowners Need to Know in 2025

# The Wildfire Insurance Crisis: What Homeowners Need to Know in 2025

In California alone, over 2.8 million homeowners received non-renewal notices in the past three years. If you live anywhere near wildland, you need to understand what's happening.

## Why insurers are dropping policies

Insurance companies use satellite imagery and AI modeling to assess wildfire risk. After the 2025 Palisades and Eaton fires caused $100 billion in losses, carriers started looking much harder at properties in the Wildland-Urban Interface (WUI).

The calculation is straightforward: when a single fire season can wipe out decades of premiums, insurers leave.

## Your options when you're dropped

When your policy gets non-renewed, you have three paths:

1. Find a new carrier—often impossible in high-risk zones, or premiums hit $2,000/month
2. California FAIR Plan—bare-bones coverage with high deductibles
3. Go uninsured—illegal if you have a mortgage, financially ruinous if fire hits

## What FAIR Plan actually is

FAIR Plan was designed as a last resort. It covers fire damage but excludes theft, liability, and most other standard protections. To get full coverage, you'll need a separate "difference in conditions" policy, often costing as much as the FAIR Plan itself.

It's better than nothing. It's not good.

## What insurers want to see

Insurance companies want to insure homes that won't burn. They're looking for evidence you've done the work:

- Photos and receipts for mitigation work
- Zone 0 clearance (the 0-5 feet immediately around your home)
- Ember-resistant vents, eaves, and windows
- Third-party assessment documentation

Insurers now request property photos before renewal. They're checking for defensible space and fire-resistant materials. A professional assessment isn't just paperwork—it's proof you've addressed the specific risks they're worried about.

## What's coming

This crisis is going to get worse. Fire seasons are lengthening, development in the WUI continues, and carriers keep exiting the market.

The homeowners who keep coverage will be the ones who document their mitigation work and can prove their homes are defensible.