Local costs and rules
Homeowners Insurance, the FAIR Plan and Wildfire in the Sacramento Region
Why home insurance is harder to find in parts of California, how the FAIR Plan works and how to shop early in escrow.
Why is homeowners insurance harder to get in parts of California?
Wildfire risk is the main reason. In areas insurers see as higher risk, some homeowners get nonrenewal notices and fewer companies are writing new policies. The California Department of Insurance's "Top Ten Tips for Finding Residential Insurance" page (undated, checked October 22, 2026) starts with what to do after a nonrenewal.
The CDI's FAIR Plan page (checked October 22, 2026) says the Insurance Commissioner reached an agreement with insurers to write more policies and move people off the FAIR Plan, under what the state calls its Sustainable Insurance Strategy. How that plays out for a given address still varies, so we treat insurance as something to check on every home.
This page is general information, not insurance or legal advice. A licensed insurance agent or broker can tell you what coverage fits your home.
What is the California FAIR Plan?
The FAIR Plan is coverage for people who can't get insurance from a regular company. The CDI describes it as a private association created by the Governor and the Legislature, run by insurance companies rather than taxpayers, with the Department overseeing it.
The CDI's tips page calls it a last-resort option with a maximum limit of $3,000,000 for all coverages combined. The residential policy is a limited fire policy. It covers fire, lightning, internal explosion and smoke.
It does not cover water damage, theft, liability or extra living expenses. The CDI says a more complete residential option is in progress. Ask a broker what's available on the day you shop, because that may have changed.
What is a difference in conditions policy?
A difference in conditions policy, often called a DIC policy, fills the gaps the FAIR Plan leaves. You buy it from a separate insurer. It can cover things like water damage, theft, liability and living expenses if you can't stay in the home.
The CDI's FAIR Plan page says policyholders who want those coverages must buy a DIC policy, and it lists insurers that sell them. Together, the FAIR Plan and a DIC policy work much like one regular homeowners policy, with two bills and two companies.
Ask your lender before you buy it whether the FAIR Plan plus a DIC policy meets the loan's insurance requirement. Get the answer in writing.
How do you shop for homeowners insurance in California?
The CDI's tips page lays out an order that works:
- Call local agents and brokers, and use the CDI's list of insurers that sell homeowners insurance.
- Compare prices and coverage with the CDI's Homeowner Premium Comparison Tool and Coverage Comparison Tool.
- If one agent can't place you outside the FAIR Plan, try other agents. The CDI's Home Insurance Finder shows which companies each agent represents.
- Ask about surplus lines insurers if regular companies say no.
- Use the FAIR Plan as a last resort, paired with a DIC policy.
You can talk with CDI staff at 1-800-927-4357. If you think a nonrenewal was unfair, the CDI says you can file a complaint with the Department.
What are Safer from Wildfires discounts?
Safer from Wildfires is a CDI program built with the state's emergency and fire agencies. The CDI's page (undated, checked October 22, 2026) says every action on its list qualifies you for an insurance discount. It groups them in three layers:
- The home: a Class A fire-rated roof, ember- and fire-resistant vents, noncombustible material on the bottom 6 inches of exterior walls, enclosed eaves, multi-pane windows or shutters, a cleared area under decks, and moving combustible sheds at least 30 feet away.
- The area around it: a 5-foot ember-resistant zone, including swapping wood fencing that touches the house for metal, and meeting state and local defensible space rules.
- The community: living in a Firewise USA site or a Fire Risk Reduction Community.
The CDI's FAIR Plan page notes that FAIR Plan customers can also get a discount on the wildfire portion of their premium for hardening their home. Keep receipts and photos of the work. Insurers will ask.
What about the foothills and rural parts of Placer and El Dorado counties?
Foothill and rural areas, with more trees, brush and slopes, are where buyers most often hear that coverage is hard to place or costs more. In Placer and El Dorado counties that can mean much of the land east of the valley floor. The answer still varies house by house, depending on the roof, the vegetation, access roads and distance to a fire station.
That's why we ask for an insurance quote on any foothill or rural home in the first days of escrow, not the week before closing. Homes with a well or septic system raise other questions. Our septic and wells guide covers those, and the county pages for Placer County and El Dorado County cover each area.
In parts of Sacramento County, flood insurance is the bigger question. See our flood zones guide.
How does homeowners insurance affect escrow and your loan?
If you're getting a loan, the lender will need proof of homeowners insurance before it funds. Your mortgage documents require you to keep that coverage for the life of the loan. The premium is part of your monthly payment, so a higher premium can lower the price you qualify for.
Many lenders collect insurance through an escrow account. The CFPB's escrow page (last modified September 13, 2024) says many lenders require taxes and insurance to be paid that way. The CFPB's force-placed insurance page (last modified March 12, 2025) warns that if coverage lapses, the lender can buy a policy and bill you. That policy usually costs more and may protect only the lender.
Maggie B. Hopkins builds your payment with a real insurance quote, not a guess, and shops the loan across a network of approved lenders. You're free to use any lender you like.
When should you start shopping for insurance when buying a home?
Start the day your offer is accepted, or sooner if you're serious about a foothill home. Here's the order we follow:
- Send the address to two or three agents or brokers right away.
- Give them the roof age and type, year built and any wildfire hardening the seller has done.
- Ask the seller for their current insurer and premium as a reference point.
- Get written quotes before your contingencies end, so you can still renegotiate or walk away.
- Send the chosen policy to your lender and escrow officer well before closing.
Our contingencies guide explains the timeline, and what happens at closing covers the last week.
How do you get started checking insurance on a home?
Call Maggie at (916) 549-3131 or send us a note with the address. We'll tell you what to ask insurers about that home and fit the premium into your full payment.
Our free buyer guide lists the other checks to make early in escrow. For a lending question, the loan options form goes straight to Maggie.
Frequently Asked Questions
What does the California FAIR Plan cover?
The residential policy covers fire, lightning, internal explosion and smoke, up to a combined limit of $3,000,000, according to the CDI. It does not cover water damage, theft or liability.
Do I need a DIC policy with the FAIR Plan?
The CDI recommends one. A difference in conditions policy covers the perils the FAIR Plan leaves out, such as water damage, theft and liability.
Will my lender accept the FAIR Plan?
Ask your lender in writing before you buy coverage. Each loan program and lender sets its own insurance rules.
How do I get a wildfire insurance discount?
The CDI's Safer from Wildfires program lists steps such as a Class A roof, ember-resistant vents and a 5-foot ember-resistant zone. The CDI says each action qualifies for a discount.
When should I get insurance quotes when buying a home?
Right after your offer is accepted. Quotes in hand before your contingencies end let you renegotiate or cancel if coverage turns out to be a problem.
Who can I call at the Department of Insurance?
The CDI's consumer line is 1-800-927-4357. The FAIR Plan itself is at 800-339-4099, according to the CDI's FAIR Plan page.
What happens if my homeowners insurance lapses?
The CFPB says your lender may buy force-placed insurance and bill you. It usually costs more than a policy you buy yourself and may protect only the lender.
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