The FAIR Plan is California’s “insurer of last resort,” a state-mandated syndicated insurance plan that offers basic property insurance to those who cannot obtain insurance from a traditional carrier. The coverage offered by the FAIR Plan is limited compared to traditional policies. The plan recently released data for the first time that shows how much their average premiums cost in different ZIP codes in California—rates that vary based on wildfire risk and replacement costs. The data revealed that there are significant regional differences in insurance rates throughout the Golden State based on geographic risk, particularly in areas where zoning regulations have contributed to sprawl into fire-prone zones.
In areas far removed from nature and wildfire risk, such as Los Angeles’s urban center, FAIR Plan premiums typically range from $300 to $400. In the “wildland-urban interface” (WUI), where civilization collides with wildlands and vegetative fuels, increased wildfire risk leads to much higher premiums. In Malibu for example, the average FAIR Plan premium costs $6,921, and in Altadena, the average is $3,089. Altadena properties with “low fire risk” carry an average premium of $1,342, with an average exposure for the FAIR Plan of $766,000. In Montebello, a Los Angeles County city located in LA’s urban center, the average exposure for the plan is $728,000, a level comparable to Altadena—yet the average premium is only $381.
If California developers were permitted to build easier in the state’s urban cores, more people would be able to live in areas with significantly less wildfire risk and live closer to their jobs. Unfortunately, due to strict zoning regulations at the local level, that has not been possible. As of 2024, more than 95 percent of residential property in California is zoned exclusively for single-family homes. Developers’ inability to build upward has meant that development has historically spread outward instead, creating a “drive until you qualify” housing market.
Development eventually reached the WUI and led to the creation of new housing in fire-prone areas. UC Santa Cruz researchers argue that rapid population growth and development in WUIs throughout the country, but especially in California, has been driven by an affordable housing crisis. All of the areas in and around Los Angeles affected by the wildfires in January 2025 are in California’s WUI.
Before the Eaton Fire in Altadena, Los Angeles County officials approved a new land-use plan to restrict development in the Altadena foothills and to permit more density in the community’s core. Tragically, the risk posed by Altadena’s geography became all too real just weeks later when 18 people were killed and more than 9,000 structures were destroyed in that community.
Taking Altadena’s new land-use plan even further, governments throughout California should eliminate burdensome zoning restrictions and allow housing to develop in accordance with market demand. The state desperately needs more housing and allowing multifamily developments—which can accommodate well over 100 units per acre—would be an effective way to ease the state’s housing shortage.
The new FAIR Plan data reveals that wildfire risk is not equally distributed in California. Governments should eliminate restrictive zoning laws that have pushed people ever further into the WUI, placing their lives and property at risk and making them dependent on the FAIR Plan.
Kristian Fors is author of “Why California’s Home Insurance Market Collapsed—and How to Fix It.” He is director of the California Golden Fleece® Awards at the Oakland-based Independent Institute.