California’s home insurance crisis has moved out of the mountains and into the suburbs. Homebuyers in Menifee and Hemet, in Riverside County, are now being pushed into surplus-lines policies with deductibles running into five figures — even though their neighborhoods sit among scrub and rolling hills, not the dense forest typically linked to the state’s worst wildfires.
Tech worker Alex Hwang found this out this summer while trying to close on a roughly $700,000, six-bedroom home in Menifee’s Cimarron Ridge development. No conventional insurer would write the comprehensive coverage his lender required, according to the Los Angeles Times. He was forced into a surplus-lines policy — largely an out-of-state, non-admitted market operating outside California’s standard insurance rules — carrying a $25,000 fire deductible.
“I hate the $25,000, but I didn’t really have a whole lot of choice. None of the big-name insurance companies were writing,” Hwang told the Times.
Hwang said he had never even heard of the company that ended up insuring his home. “I call it ‘no-name insurance,’ because I have never heard of these people.”
He’s not alone. A Riverside County buyer identified only as Louis told the Times he and his wife panicked after being turned down by conventional carriers, eventually settling for a policy with a $14,000 fire deductible.
Low-risk homes flooding the state’s insurer of last resort
A Times analysis found that across 396 ZIP codes, nine out of every 10 policies added to the California FAIR Plan between March 2025 and June 2026 were classified as low-risk. More than 11,000 such homes joined the FAIR Plan in that period alone, on top of 138,000 low-risk properties already enrolled.
The FAIR Plan exists as the state’s insurer of last resort — bare-bones fire coverage for homeowners who can’t get a standard policy. It typically costs more and requires a second policy to cover ordinary risks like theft or water damage.
Near Menifee, FAIR Plan enrollment has jumped fivefold since 2024. In neighboring Hemet, it’s up 660%.
Big insurers pulling back, no-name insurers moving in
Major carriers have been retreating from California as wildfire losses, construction costs and reinsurance costs climb. State officials point to the scale of recent fires and rising climate-related risk as key drivers of the market’s collapse.
Since 2015, dozens of major fires have destroyed thousands of buildings and killed hundreds of people, according to the California Department of Insurance.
State regulators have rolled out new reforms meant to get insurers writing more policies in wildfire-distressed areas, in part by letting companies factor in catastrophe modeling and reinsurance costs. So far, the exodus continues. Surplus-lines insurers have stepped into the vacuum, now covering about 7% of California’s home insurance market — up from just 1% in 2021, according to Weiss Ratings.
For buyers like Hwang and Louis, that shift means five-figure deductibles and coverage from companies they’ve never heard of, in neighborhoods nobody would have flagged as high fire risk just a few years ago.
