How to Lower Insurance Costs in High Fire Risk Zone?

If you live in a wildfire-prone area and your insurance rates have skyrocketed - or worse, you’ve lost coverage altogether - you’re not alone. Across California and other wildfire-exposed regions, homeowners are struggling to find affordable property insurance. Business owners aren’t far behind. According to a 2023 report by the U.S. Senate Budget Committee, nonrenewal notices in California surged by nearly 30% from 2018 to 2022, reaching more than 620,000 annually.

This guide breaks down why this is happening, what’s changing in the market, and most importantly, what you can do about it. You’ll learn how to take concrete steps to lower your premiums, improve your risk profile, and keep your property protected.

Why Coverage Is So Hard to Find

Insurance companies have become better at matching premiums to wildfire risk. Their models are more precise, and pricing now reflects the true cost of coverage in high-risk zones. That accuracy, however, has had a side effect: Many homeowners can no longer afford the policies being offered. Preferred carriers, regulated, admitted insurance companies that are operating under state oversight, are shrinking their footprint, and many properties are now landing in the Excess and Surplus (E&S) market or under Fair Access to Insurance Requirements (FAIR) plans.

What FAIR Plans Are - and Aren’t

FAIR plans aren’t insurance companies in the traditional sense. They exist to offer basic property coverage when no preferred carrier will take on the risk. These preferred carriers must follow strict rules on pricing, coverage forms, and claims handling. When they decline to insure a property due to wildfire exposure, the FAIR plan becomes a last-resort option. But the structure and operation of these plans are often misunderstood. Here’s what sets them apart:

• They aren’t backed by state Insurance Guarantee Funds.
  If a traditional insurance company fails, the state's guarantee fund steps in to pay claims. That safety net doesn’t apply to FAIR plans. If the FAIR plan runs out of funds, the industry’s preferred market makes up the difference through assessments based on market share.
• They aren’t government-run or private insurance carriers.
  While many assume these plans are government programs, they’re actually (NGOs) for-profit entities established by statute. They operate independently from the government,  under the oversight of a board comprised of small, medium, and large carriers that operate in that state. The industry manages the FAIR plan through the board of directors and partake in both the profits and the losses through assessments (when losses exceed surplus on hand) and distributions of profit (when surplus levels exceed prior and future expected loss), They’re not managed by state agencies or owned by private shareholders.
• They issue their own policies and handle their own claims.
  Coverage is provided directly by the FAIR plan, not through another carrier. That means if you file a claim, the FAIR plan, not a private insurer, will evaluate and pay it, according to its own procedures and coverage limits.
• Their boards are composed of insurers from the markets they serve.
  Insurers doing business in the state are typically required to participate in the FAIR plan and may sit on its board. This means that even if a carrier doesn’t insure your property, it still has a role in helping the FAIR plan function.
• If losses exceed their available funds, the industry issues an assessment, which means that preferred carriers help cover the gap.
  When a major event like a wildfire overwhelms the FAIR plan’s reserves, participating insurers must pay a portion of the shortfall. These assessments are mandatory and shared across the industry, even by companies that declined to write those high-risk policies in the first place.

Even if a preferred carrier declines to write your policy, it’s not off the hook. If your home ends up insured by a FAIR plan and is later destroyed in a wildfire, that carrier could still be assessed to help cover your claim. Preferred carriers include these payouts in their rate filings, so your carrier is helping support the FAIR plan and the premium you pay for your home outside of these high risk areas allows them to do so.

The Rise of E&S Carriers

Excess and Surplus (E&S) carriers operate outside of the preferred market. Unlike admitted carriers, they don’t have to follow the same regulatory constraints. That flexibility allows them to stay active in areas where coverage is hard to place, but it also means policies may come with tradeoffs homeowners need to understand.

• They aren’t bound by the same rate and form filing requirements.
  E&S carriers can change rates and coverage terms without getting prior approval from the state’s Department of Insurance. This gives them speed and flexibility in reacting to changing risk conditions, but also means your premium can change quickly, and coverages may vary widely between carriers.
• They use innovative underwriting models.
  Because they’re not limited to approved rating formulas, E&S carriers often rely on advanced models, proprietary scoring, or newer forms of data to assess risk. This can benefit homeowners who’ve done mitigation work not recognized by traditional insurers, but it also means the basis for your rate may be less transparent.
• They avoid FAIR plan assessments.
  Since E&S carriers aren’t part of the admitted market, they don’t participate in funding the FAIR plan. This shields them from industry-wide assessments when losses occur. That independence helps them remain profitable, but it also means they’re not contributing to the shared safety net that supports higher-risk properties.
• Their policies may cost more and offer less standardization.
  Without regulatory oversight, E&S policies can include exclusions or limitations that wouldn’t be allowed in the preferred market. Coverage terms can be narrower, and consumer protections may be fewer. It’s essential to read E&S policy documents closely and ask questions before purchasing.

So there’s a tradeoff: The overall greater freedom often allows E&S insurers to remain profitable in high-risk markets, but their products tend to cost more, offer less standardization, and vary widely in terms.

Why Rates Stay High Even With Fewer Policies

In most lines of insurance, carriers have traditionally lowered premiums by improving internal efficiency to reduce overhead, streamline operations, and drive down expense ratios. But in wildfire-prone areas, that strategy has its limits. Every new policy adds exposure, which increases reinsurance costs and the potential for a large-scale loss. To avoid overwhelming their capital reserves, many insurers are actively limiting their growth in high-risk zones.

This leads to a strange dynamic: Coverage may still be technically available, but at prices that few homeowners can afford. And the consequences ripple beyond individual properties. Home sales stall when buyers can’t secure insurance. Mortgages fall through. Properties sit vacant, often deteriorating, and remain uninsured. Over time, these abandoned homes can become fuel for the next wildfire and threaten not only nearby structures but the safety and stability of entire communities.

Why Mitigation Is Your Best Tool

When coverage becomes expensive or disappears, mitigation becomes your best option to find insurance. In high-risk wildfire areas, insurers are tightening their books, and underwriting models are becoming more selective. But there’s a critical shift happening that works in your favour: Regulators in California and other western states now require insurers to offer discounts when specific mitigation steps are taken. That changes the dynamic.

You’re no longer at the mercy of pricing models alone. You can influence your own risk profile.

The key is understanding which actions move the needle, both for your property and for your surrounding community. Wildfire mitigation isn’t just about individual safety. It’s about proving to insurers that your home is measurably less likely to burn, and that your neighborhood won’t amplify the threat.

Here’s what makes a difference:

• Reduce fuel loads on and around your property.
• Support prescribed burns in your area.
• Keep vegetation healthy throughout your community.
• Help neighbours mitigate and qualify for discounts.
• Create strategic fuel breaks where they matter most.
• Learn what’s in your Community Wildfire Protection Plan (CWPP)—and hold officials accountable.
• Become a Firewise-recognized community.

The more collective the effort, the more impactful the results. Let’s look at what your mitigation strategy can look like.

The MRS Method: Mitigate. Record. Submit.

Understanding risk is just the start. Lower premiums are a result of proving that you’ve reduced risk. Think of your insurer as a partner in managing that risk. Use this approach:

Mitigate

Start with a plan. The IBHS Wildfire Prepared Home Standard is your roadmap. In California and other wildfire-prone states like Oregon, Colorado, Utah, and New Mexico, it’s increasingly being used by insurers and regulators to define eligibility for discounts and guide defensible space requirements.

Focus on these areas:

• Zone 0 (Five-Foot Zone):  Remove all combustibles and vegetation from a five-foot perimeter around your home. This is the ignition zone most likely to catch wind-blown embers.
• Structure Hardening: Enclose eaves, install 1/8" metal mesh over vents, use fire-resistant siding and roofing, and remove roof debris and overhanging branches that can trap embers.
• Non-Combustible Attachments: Decks, porches, awnings, and gutters should be made of non-flammable materials or retrofitted to prevent ignition during ember storms.
• Yard Cleanliness:  Clear away dead or overgrown vegetation, debris, unused vehicles, and combustible clutter that could accelerate fire spread around the home.

Other essentials:

• Request a free inspection from your local fire department to verify NFPA 1144 compliance: This helps confirm that your home meets nationally recognized standards for ignition resistance, strengthening both your safety and your case for insurance discounts.
• Ensure you have a safe evacuation route: Life safety comes first. Having a clear, practiced exit route protects your household when minutes matter and shows insurers you’ve planned beyond just structural protection.An evacuation route for you is also an access route for fire fighters.
• Meet with your local Firewise community: Coordinate efforts. Working through Firewise ensures your actions align with neighborhood strategies, and many insurers weigh this community-level engagement in risk assessment.
• Document your plan and share it widely: A community-wide wildfire preparation day helps everyone. Shared efforts signal collective readiness to boost visibility with carriers, reducing regional risk, and protecting more than just your own property. One 100,000-acre wildfire obviates the benefit of an entire year of GHG emissions reduction efforts for the entire state of California. The work you do to protect your property protects us all.

Record

• Take new photos showing improvements: Insurers need visual evidence that risk factors have been addressed. Photos make it easier for them to justify discounts or reconsider non-renewals.
• Include neighbouring properties if there was a joint effort: Showing that mitigation was done at the community level can strengthen your case by demonstrating collective risk reduction, not just individual effort.
• Organize before-and-after comparisons: Side-by-side images make changes obvious, helping underwriters quickly assess the improvement in defensibility.
• Keep receipts and inspection reports: Proof of expenses and third-party evaluations add credibility to your submission and support eligibility for verified mitigation discounts.

Submit

Send your evidence to your insurer or broker, ideally at least 60 days before your renewal. In states like California, insurers are required by law (under Insurance Code §675.1) to evaluate risk mitigation efforts before making non-renewal decisions. Submitting documentation early gives you time to engage in that review process.

Ask directly about discounts linked to wildfire mitigation. In California and several other western states, regulations require insurers to factor in property-level and community-level risk reduction when pricing or deciding to renew. If you’ve completed work aligned with the IBHS Wildfire Prepared Home Standard or your local Firewise guidance, your insurer may be obligated to reconsider or adjust your terms.

What If Your Policy Gets Dropped Anyway?

Even if you've taken all the right steps, your insurer might still decide not to renew your policy. But that’s not the end of the road—and many states, not just California, offer structured appeal paths and consumer protection.

• Request your full policy and supporting documents:  Know your rights as a policyholder. They are included in your policy and can usually be found towards the back of the insurance package. Ask your insurer for a written explanation of the non-renewal and for any inspection reports, risk scores, or modeling data used in the decision. In California, this right is protected under Insurance Code §791.10. Other states may offer similar access under their own consumer protection statutes.
• File an appeal with the underwriting department:  Write a concise letter explaining the improvements you’ve made, attach photos and receipts, and request a formal re-evaluation. Refer to any local mitigation standards, such as the IBHS or NFPA 1144, to support your case. Send a copy to the department of insurance and ask for their assistance.
• Contact your state’s Department of Insurance (DOI):  Most states have a DOI consumer complaint division that can intervene or request clarification from your insurer. In California, for example, the DOI typically requires a carrier to respond within 21 business days. Even in states without wildfire-specific regulations, a formal complaint can trigger a deeper review or internal audit of your file. You can find your state’s DOI here: State Insurance Department Lookup – NAIC Tool
• Provide complete proof of mitigation: Include before-and-after photos, third-party inspections, and any documentation tied to your work. In wildfire-prone states like California, Safer from Wildfires regulations mandate that insurers must consider structural and community-level mitigation before canceling or declining to renew. Other states may not yet require this, but strong documentation still gives you leverage, especially if underwriting guidelines haven’t changed. Your policyholder’s rights include the right to a renewal and carriers must follow strict guidelines to infringe upon that right.

Even when laws differ by state, the principle remains: if your home is demonstrably less risky than when the policy began, you may have grounds for reinstatement or a more favorable offer of renewal.

Final Thoughts

Wildfire risk isn’t going away, but that doesn’t mean you’re powerless. If insurance seems out of reach, your best strategy is to act on what you can control: harden your home, document your work, and speak up. Insurers are under pressure too, and many are open to re-evaluating policies if given a clear picture of reduced risk.

Protect your home. Strengthen your community. Keep your options open.

In Memory of Tammy Schwartz 1967 - 2025