The Center for California Real Estate (CCRE) has issued a report outlining proposed solutions for the state’s ongoing homeowners insurance challenges.
The report recommends changes to California’s regulatory structure, particularly around the pace and process of rate approvals. Forum participants noted that the state’s average time to approve rate filings – approximately 11 months – far exceeds the national average of 64 days.
Suggestions included adopting automatic, incremental rate increases modeled after those used in utility and property tax adjustments to provide insurers with greater predictability.
Delays in the rate approval process have been a recurring concern for insurers operating in California. Several major carriers have cited the prolonged timeline under Proposition 103 as a reason for limiting or exiting the state’s property insurance market.
The rate-setting structure, which mandates public disclosure and allows for third-party intervention, has contributed to hesitation among private insurers, even as wildfire-related risk increases.
"It's time to move from fragmented efforts to coordinated and public-private sector solutions that can stabilize the market, protect homeowners, and build long-term sustainability across the state," said Pete Peterson (pictured above), Dean of the Pepperdine University School of Public Policy, who facilitated the forum for the CCRE report.
To support mitigation at scale, participants also called for significant investment in resilience measures. The report estimates $20 billion to $25 billion in costs over the next five years and $2 billion annually thereafter. A co-funding model involving insurance and utility companies was discussed as a way to distribute financial responsibility and deliver support to high-risk zones.
Tying financial incentives directly to risk-reduction efforts was another key recommendation. The report highlights that standardized insurance discounts linked to mitigation could encourage property-level changes.
Examples included Alabama’s Fortified homes program and a study showing homes in Zone 0 with mitigation features could be 50% more likely to survive a wildfire.
The report also addresses the need for common standards in fire risk modeling. Current variability among models complicates underwriting and regulation. Panelists cited projects like FireBench and efforts by individual carriers, such as Mercury Insurance’s parcel-level modeling, as potential benchmarks that could offer standardized and flexible assessment tools usable across stakeholders.
Expanding public education and neighborhood engagement was emphasized as essential to advancing mitigation efforts. Programs such as the Wildfire Prepared Neighborhood initiative and local Fire Safe Councils were cited as early examples. However, panelists stressed that long-term funding and sustained public participation are necessary for effectiveness.
Some regulatory accommodations are already emerging in response to ongoing market instability. State Farm, one of California’s largest home insurers, recently secured approval for a 22% rate increase after reaching an agreement with regulators to limit policy non-renewals.
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