El Dorado County (Oct 7, 2024) – EL DORADO COUNTY, Calif. — Kathy and Rich Arian, residents of Sierra Springs in El Dorado County, have watched their home insurance premiums skyrocket in recent years. Living in a Firewise-certified community with wildfire risk mitigations in place, the couple was dismayed when their insurance company, AAA, dropped them. Now, their only option is the California FAIR Plan—a high-cost, bare-bones insurance policy of last resort.
When they first purchased their home a decade ago, the Arians paid about $1,000 a year for coverage with a $100 deductible. However, their upcoming renewal with the FAIR Plan has left them with a staggering $6,799 premium and a $10,000 deductible. Being on a fixed income, this increase has made maintaining their insurance difficult. “It’s becoming almost untenable for us,” said Rich, reflecting the frustration that many California homeowners share as they navigate the state’s growing home insurance crisis.
The couple is particularly frustrated by the lack of transparency in the FAIR Plan’s pricing. Kathy noted that, although their Firewise status is supposed to reduce premiums by 10%, there’s no clear breakdown of where or how those discounts are applied. “I have to trust that they did,” she said. Adding to their confusion is the comparison with a family member who lives in the Truckee area. Kathy’s niece has a much larger, more valuable home yet pays $500 less annually for her FAIR Plan premium. “Why is that home in Truckee not as expensive to insure as ours when it’s worth four times as much and is three times larger?” Kathy asked.
Insurance expert Aurora Mullett of Sky Insurance Group explained that factors such as proximity to a fire department—something the Arians lack—can significantly increase premiums. Even among neighbors, differences in fire risk exposure can lead to widely varying rates. According to Mullett, this leaves many homeowners perplexed when comparing their premiums to others.
In response to inquiries, the FAIR Plan issued a statement, saying that premium costs depend on factors such as a property’s fire risk, chosen coverages, and eligibility for discounts. The statement emphasized the importance of working with an insurance broker to navigate these details. However, Kathy remains dissatisfied, stating, “They need to be transparent. Like every other insurance policy, it should have all the deductions.”
With no relief in sight, the Arians are left questioning whether they can continue to afford to stay in California. As more homeowners are forced into the FAIR Plan, experts warn that rising risk will continue to push prices higher—a problem likely to worsen unless significant changes are made in the state’s insurance market.
