A few years ago, insurance was an afterthought in a Westside purchase - a box you checked a week before closing. Today it's often the first thing I bring up, because in 2026, whether and how you can insure a coastal LA home can decide the deal. After the January 2025 Palisades Fire, I've watched insurance go from paperwork to the single biggest variable in some of my transactions.
So let me walk you through it the way I walk my buyers through it: what the California FAIR Plan is, why most coastal buyers also need a second policy alongside it, what it actually costs right now, and where the market is finally starting to improve. One honest caveat up front - I'm a real estate broker, not a licensed insurance agent. Treat this as a buyer's orientation, not insurance advice, and confirm the specifics with a licensed California insurance professional before you rely on any number here.
Why insurance moved to the center of every Westside deal
Coastal Los Angeles - the canyons above the Palisades, the hillsides of Malibu, parts of Brentwood and the Santa Monica Mountains - carries real wildfire exposure, and insurers price that exposure aggressively. After the 2025 fires, several major carriers pulled back or stopped writing new policies in the highest-risk zones. The result is simple: you can no longer assume that the home you love is easily insurable at a price you've budgeted for. That's exactly why I now treat insurability as part of due diligence, not an afterthought.
What the California FAIR Plan actually is
The FAIR Plan is California's insurer of last resort. It exists so that property owners who can't find coverage on the open market still have somewhere to go. Two things you need to understand about it:
It's primarily fire coverage. The FAIR Plan covers fire and a few related perils. It does not, on its own, cover the things a standard homeowners policy does - liability, theft, water damage, and so on.
The dwelling limit was recently raised to $3 million. Under reforms led by the state insurance commissioner, the FAIR Plan's maximum residential dwelling coverage went from $1.5 million up to $3 million. That matters on the Westside, where rebuild costs on a luxury home can run well past older limits - though for the largest estates, even $3 million in dwelling coverage may not be enough on its own.
The DIC policy - the other half of the puzzle
Because the FAIR Plan is fire-focused, most of my buyers who go that route pair it with a second policy called a Difference in Conditions (DIC) policy. Think of the DIC as a wrap that fills the gaps the FAIR Plan leaves open: liability, theft, water damage, and other standard homeowners protections.
Together, the FAIR Plan plus a DIC is designed to approximate the coverage of a traditional homeowners policy. The trade-off is cost - a FAIR Plan-plus-DIC combination often runs meaningfully more than a single conventional policy would have a few years ago. I want my buyers to know that going in, because it changes the monthly carrying cost of the home.
What it costs in 2026
Here's the honest range, statewide: FAIR Plan premiums average roughly $3,000 to $3,200 a year, but that average hides enormous spread. Properties in high-wildfire zones - which includes a lot of the coastal hillsides my clients buy in - commonly pay $5,000 to $12,000, and the most extreme ZIP codes can reach $32,000 or more. Add the DIC on top, and a FAIR Plan-plus-DIC package often costs 20 to 40 percent more than a fire-only plan.
One more number to plan around: the state approved an average 29.1% FAIR Plan rate increase, effective October 15, 2026, and for properties with significant wildfire exposure, the increase to that portion of the premium can be even steeper. If you're buying this year, budget forward, not backward.
The market is finally starting to thaw
It's not all bad news, and I make sure my buyers hear the other side too. Under the state's Sustainable Insurance Strategy, carriers that want to use modern catastrophe modeling have to commit to writing more policies in wildfire-exposed areas. That framework is starting to bring capacity back:
In April 2026, Travelers became the first top-10 national carrier to voluntarily join the strategy and signal it will expand availability across the state, including underserved wildfire areas.
Carriers including Mercury, CSAA, Farmers, USAA, Pacific Specialty, and California Casualty have committed to growing rather than shrinking their California books. CSAA reported writing thousands more high-hazard policies than required, and Mercury set a target to move a share of FAIR Plan policyholders onto its own coverage over the coming years.
Translation: if a home can only be covered through the FAIR Plan today, that may not be permanent. The market is moving in the right direction, even if slowly.
How to lower the bill - wildfire hardening
You have more control than you might think. The FAIR Plan updated its wildfire hardening discount program in late 2025, and qualifying homes can now stack up to 12 individual discounts on the wildfire portion of the premium - potentially up to around a 16% reduction on that portion for a home that qualifies for all of them. These come from things like a Class A fire-rated roof, ember-resistant vents, defensible space, and other recognized mitigation. When I'm advising a buyer on a hillside property, hardening isn't just safety - it's a line item on the insurance bill.
How I fold insurance into your purchase
Here's my actual process, because this is where a good agent earns their keep right now:
We check insurability early - before you're emotionally committed. I'd rather know on day three than day thirty.
You get real quotes during your contingency period, not estimates. A FAIR-Plan-plus-DIC number from a licensed broker is part of how we decide what the home truly costs you.
We factor the premium into the offer. Carrying cost is part of value. A $12,000-a-year insurance bill changes the math, and we price accordingly.
We document hardening opportunities so you know what the premium could become after you improve the property.
If you want to get your footing on the rest of the process first, our buyer preparation guide is a good companion to this one. And if you're looking specifically in the burn area, read it alongside my note on Pacific Palisades after the fire.
Let's talk
Insurance shouldn't be the thing that surprises you at the closing table. Before you fall for a Westside home, I'll help you understand what it will actually cost to protect it - and connect you with the insurance professionals who can quote it properly.
Reach out to me or call 310.595.5181. I'm a Compass Broker Associate with Antola Coastal Group, RealTrends Verified in the top 1.5% nationally, and a lifelong Westsider who has guided buyers through this exact issue on both sides of the 2025 fires.
Frequently Asked Questions
Can you still get home insurance in Pacific Palisades and Malibu in 2026?
Yes, though it's harder and more expensive than it used to be. Many buyers in the highest-risk coastal zones now rely on the California FAIR Plan, usually paired with a Difference in Conditions (DIC) policy. The good news is that under the state's Sustainable Insurance Strategy, some major carriers began expanding availability again in 2026.
What is the California FAIR Plan?
The FAIR Plan is California's insurer of last resort, created so property owners who can't find coverage on the open market still have a fire-insurance option. It primarily covers fire and related perils - not the full range of a standard homeowners policy - and its maximum residential dwelling limit was recently raised to $3 million.
How much does the FAIR Plan cost in 2026?
Statewide it averages roughly $3,000 to $3,200 a year, but high-wildfire-zone properties commonly pay $5,000 to $12,000, and the most extreme areas can exceed $32,000. An average 29.1% rate increase takes effect October 15, 2026, so budget forward if you're buying this year.
What is a DIC policy, and do I need one?
A Difference in Conditions (DIC) policy wraps around the FAIR Plan to cover what it doesn't - liability, theft, water damage, and other standard homeowners protections. Most buyers who use the FAIR Plan pair it with a DIC so their overall coverage resembles a traditional homeowners policy.
Are insurance companies coming back to the Westside?
Slowly, yes. In April 2026, Travelers became the first top-10 national carrier to voluntarily join California's Sustainable Insurance Strategy and signal expanded availability, and several other carriers have committed to growing their California books rather than shrinking them.
Can I lower my wildfire insurance premium?
Often, yes. The FAIR Plan's updated wildfire hardening program lets qualifying homes stack up to 12 discounts on the wildfire portion of the premium through measures like a fire-rated roof, ember-resistant vents, and defensible space. Hardening a hillside property can meaningfully reduce that part of your bill.
How should insurance affect my offer on a home?
Treat the premium as part of the home's carrying cost. A property that can only be insured at $10,000-plus a year genuinely costs more to own, and I factor that into pricing and negotiation rather than discovering it at closing.