Quick answer: Most big insurers didn’t actually leave California. They stopped selling new homeowners policies and dropped some existing customers in high-risk areas. Allstate stopped writing new California home policies in late 2022, and State Farm, the state’s largest home insurer, stopped in 2023 (ABC7; CDI). In 2026 the tide is starting to turn: both companies filed in August and September 2026 to reopen for new business, and the California Department of Insurance (CDI) says 12 insurance groups have now filed or been approved to expand (CDI).
If you’re a Sacramento homeowner, you’ve probably heard “insurers are leaving California” a dozen times. It’s a scary headline, and it’s only half right. Knowing what really happened, and what’s changing now, helps you decide whether to stay put, shop around, or get off the FAIR Plan.
This guide explains which insurers pulled back and why, who’s coming back, what it means for Sacramento-area homeowners, and what to do if your policy isn’t renewed.
⚠️ Scope note: This guide covers owner-occupied homeowners insurance in California, with a focus on the Sacramento area. Insurer plans change quickly and some filings are still pending, so confirm current availability with a licensed California agent. It doesn’t cover condos, rentals, or commercial property in detail.
Are insurance companies really leaving California?
Not in the way most people think. The large insurers that made headlines are still in California and still renewing millions of existing policies. What changed is that several stopped or limited new homeowners policies, and some nonrenewed customers in high-risk areas.
| Insurer | What it did | When | Status in 2026 |
| Allstate | Stopped writing new homeowners policies | Late 2022 | Filed to reopen for new business on Aug. 31, 2026 (CDI) |
| State Farm | Stopped accepting new homeowners applications | 2023 | Filed to reopen on Sept. 18, 2026 (CDI) |
| State Farm | Announced nonrenewal of about 72,000 policies (30,000 homes and 42,000 apartments) | March 2024 | Agreed to pause new nonrenewal programs as part of its rate settlement (AP via News4JAX; CDI) |
| Farmers | Capped new homeowners policies | Before 2025 | Removed its cap in November 2025 (Insurance Journal) |
Here’s the part that surprises people. State Farm’s 72,000 nonrenewals were just over 2% of its California portfolio (AP via News4JAX). That’s painful if you’re one of them, but it’s not the same as a company packing up and leaving the state.
Why did insurers stop writing new policies in California?
Insurers say the risk they were taking on had grown faster than the prices they were allowed to charge. When State Farm announced its 2024 nonrenewals, it cited “inflation, catastrophe exposure, reinsurance costs, and the limitations of working within decades-old insurance regulations” (AP via News4JAX).
Four pressures came together:
- Wildfire losses. The January 2025 Eaton and Palisades fires caused about $40 billion in insured losses and destroyed nearly 16,000 structures, the most expensive wildfire event in industry history (Insurance Journal).
- Rebuilding costs. Labor and materials got more expensive, so every claim costs more. Allstate cited wildfire risk and rebuilding costs when it paused in 2022 (ABC7).
- Reinsurance costs. Insurers buy their own insurance, called reinsurance, and its price rose sharply after big catastrophes.
- Rate rules. Until recently, California didn’t let insurers price with forward-looking catastrophe models or pass along reinsurance costs. Insurers also faced long reviews; Insurance Journal reports a median of 197 days to approve a rate filing (Insurance Journal).
Are insurers coming back to California in 2026?
Yes, slowly and selectively. CDI’s Sustainable Insurance Strategy now lets insurers use catastrophe models and reinsurance costs in their rates. In exchange, major insurers must write policies in wildfire-distressed areas equal to at least 85% of their statewide market share (CDI).
What’s happened since:
- State Farm and Allstate filed to reopen for new business in September and August 2026. State Farm’s filing commits to writing homes that meet the Insurance Institute for Business & Home Safety (IBHS) Wildfire Prepared Home standards (CDI).
- Twelve insurance groups have filed or been approved under the new framework (CDI).
- Farmers, Mercury, Travelers, and CSAA are among the insurers expanding, and Mercury has committed to write 38,000 new policies (Insurance Journal).
- FAIR Plan growth is slowing. The FAIR Plan added about 12,000 policies in the second quarter of 2026, its fifth straight quarter of slower growth, down from more than 54,000 a quarter in early 2025 (Insurance Journal).
Not everyone is convinced. Consumer Watchdog counts about 12,189 new-policy commitments since January 2025, in exchange for $571 million in approved rate increases, and calls that number small next to the roughly 697,000 FAIR Plan policies in force in June 2026 (KPBS). As one Cal State Northridge professor put it: “Insurers are tiptoeing back into the market. They’re doing it selectively” (KPBS).
The honest takeaway: options are increasing, but returning insurers will be choosy, and prices are higher than they were.
What does this mean for Sacramento homeowners?
Most homeowners in the Sacramento Valley floor still have standard options. The pullback hits hardest in wildfire-exposed areas.
In central Sacramento, a basic policy averages about $1,361 a year, below the California average of $1,543 (MoneyGeek). Eugene C. Yates Insurance Agency, a Sacramento independent agency, reports that lower-risk urban neighborhoods like Midtown, Land Park, and Curtis Park still have competitive markets, while Folsom, Orangevale, and Fair Oaks face more carrier restrictions and higher premiums because they’re closer to wildland (Eugene C. Yates Insurance Agency).
Up in the foothills, the picture is tougher. In 2023, insurers didn’t renew 11.9% of homeowners policies in El Dorado County and 17.2% in Nevada County (MoneyGeek).
| Area | Typical situation in 2026 |
| Central Sacramento (Midtown, Land Park, Curtis Park) | Standard insurers still competing; averages near $1,361 a year |
| East county near open space (Folsom, Orangevale, Fair Oaks) | More carrier restrictions; higher premiums |
| Foothills (El Dorado, Placer, Nevada counties) | High nonrenewal rates; many homes on the FAIR Plan plus a second policy |
Sources: MoneyGeek; Eugene C. Yates Insurance Agency; MoneyGeek county data.
What should you do if your insurer won’t renew your policy?
Don’t wait, and don’t let coverage lapse. California insurers must give at least 75 days’ written notice before a nonrenewal (Kin).
- Read the notice. Note the reason and the date coverage ends.
- Ask whether a fix would change the decision. If the reason is your roof or vegetation, documented repairs or defensible-space work may help.
- Call an independent agent right away. An independent agent can quote several companies, including the ones now expanding.
- Check whether you’re under a moratorium. After a declared wildfire emergency, the Insurance Commissioner can block nonrenewals for one year in affected ZIP codes (Kin).
- Use the FAIR Plan only as a backstop. It covers fire, lightning, smoke, and internal explosion up to $3 million, but not water damage, theft, or liability, so pair it with a difference in conditions (DIC) policy (ValuePenguin).
- Call CDI if you need help. The consumer hotline is 1-800-927-4357 (CDI).
Should you leave the FAIR Plan now that insurers are returning?
It’s worth checking, especially if you moved to the FAIR Plan in the last few years. The FAIR Plan’s average rate rises 29.1% on October 15, 2026 (KQED), and a FAIR Plan policy plus a DIC policy often costs more than one standard policy.
- Ask an independent agent to shop the standard market at your next renewal.
- Document your home hardening. A Class A roof, ember-resistant vents, and a cleared 5-foot zone around the house all earn discounts under California’s Safer from Wildfires rules (CDI), and State Farm’s reopening filing focuses on homes that meet wildfire-prepared standards (CDI).
- Don’t cancel the FAIR Plan until a new policy is bound. A gap in coverage can violate your mortgage and make the next insurer less willing to write you.
Insurers leaving California FAQ
Question: Did State Farm leave California?
Answer: No. State Farm stopped accepting new homeowners applications in 2023 and nonrenewed some policies, but it’s still California’s largest home insurer and filed to reopen for new business on September 18, 2026 (CDI).
Question: Is Allstate writing new home policies in California?
Answer: Allstate stopped in late 2022 and filed to resume new residential business on August 31, 2026 (CDI). Ask an agent whether it’s quoting in your area yet.
Question: Which insurers are expanding in California?
Answer: Insurance Journal lists Farmers, Mercury, Travelers, and CSAA among nine insurers committed to expansion (Insurance Journal), and CDI says 12 groups have filed or been approved under its new framework (CDI).
Question: Will my premium go down now that insurers are returning?
Answer: Probably not right away. Insurers are returning with higher, model-based rates; State Farm’s 17% homeowners increase stands under its 2026 settlement (CDI). More competition can still help you find a better price than you have now.
Question: Is it hard to get home insurance in Sacramento?
Answer: In most of the Sacramento Valley floor, no. Standard insurers still compete, and Sacramento averages about $1,361 a year (MoneyGeek). Homes near wildland in east county and the foothills have fewer options.
About the author
Brandon Erickson | IVMG LLC
With 7 years of experience writing insurance content, I specialize in creating clear, informative, and engaging articles that help consumers better understand auto, home, and other types of insurance. My writing focuses on answering real customer questions, simplifying complex insurance topics, and creating useful content that performs well in search engines while providing genuine value to readers.
Last updated: October 2026 | Next review: Monthly (insurer plans change often)
Disclaimer: This content is for general informational purposes only and is not insurance, legal, or financial advice. Brandon Erickson is not a licensed insurance agent. Please speak with a licensed insurance agent about any questions regarding your coverage.