Davis resident Curtis Fritz said his insurance agent has struggled to find a company willing to insure his home.
“Even though we’re not in a flood zone, we’re not in a fire zone, we have none of the risk factors,” Fritz said. “But we are in California and that alone is enough to deter them from issuing a policy.”
Fritz’s experience reflects one of the challenges facing California’s insurance market as homeowners struggle to find coverage even outside areas considered especially vulnerable to wildfires.
The devastating Palisades and Eaton fires in January 2025 brought those challenges into sharper focus. Thousands of homeowners faced uncertainty over whether their policies would be renewed, how much insurers would pay to rebuild and where they could turn for coverage.
The market was already under strain before the fires. State Farm had announced plans to drop thousands of policies in California, citing its exposure to growing fire risks.
Many homeowners turned to the FAIR Plan, a state-created insurer of last resort, as private insurers pulled back. The plan’s policy count rose to nearly 700,000 by June 2026.
Now, two Democrats running to lead the California Department of Insurance are offering different approaches to the crisis.
Democratic State Senator Ben Allen wants to strengthen the existing private insurance market, using wildfire mitigation and regulatory changes to encourage insurers to keep offering coverage.
Former San Francisco Supervisor Jane Kim, meanwhile, wants the state to take a much larger role, including by creating a public program to cover catastrophic losses.
Their proposals extend beyond homeowners insurance to auto coverage and where California should build new housing. But the race also raises a more basic question: What can the insurance commissioner actually do to carry out those plans?
Regulating insurers
California’s insurance commissioner is an elected statewide official independent of the governor's office who leads the Department of Insurance. The department licenses and regulates insurance companies, reviews rates, investigates complaints and enforces state insurance laws.
The commissioner has considerable authority over how insurers operate. Under Proposition 103, for instance, the department reviews proposed rate changes for homeowners and auto insurance.
But the office has limits. The position cannot create a new insurance program — that requires legislation.
“The power that the commissioner actually has is to administer the system and enforce the laws on the books,” Stanford insurance policy expert Michael Wara said.
However, the commissioner can also influence the insurance market through programs like the Safer from Wildfires program, which ties wildfire mitigation efforts to insurance discounts.
Kim’s platform promises to create a public Disaster Insurance for All program to cover catastrophic losses, including wildfire losses. The proposal would fundamentally change how California provides disaster coverage, shifting more responsibility to the state rather than relying primarily on private insurers.
Wara warns that kind of change would require legislative support and questioned whether a publicly run program could charge premiums high enough to cover major disasters.
“What will happen in practice if you have a politician setting insurance rates is they will be set too low,” Wara said.
Kim argues that a public program could pool risk, improve access to coverage and invest in making communities more resilient, pointing to public disaster insurance systems in other countries as models.
Allen would work to improve the private market rather than replace it. His plan emphasizes wildfire mitigation, a more efficient rate-review process and stronger oversight of insurers’ treatment of customers after disasters.
The approaches reflect a central disagreement over how to stabilize the market. One candidate hopes to create reforms that make private insurance more available while the other seeks a public alternative to cover losses that private insurers may not want to take on.
A public option for auto insurance raises different questions
The candidates also disagree about how to expand access to affordable auto insurance as the state’s largest insurers have raised rates sharply in recent years.
Companies covering roughly 85% of California’s auto insurance market increased rates on average by more than a third from 2023 to 2025, according to the Los Angeles Times.
California already has a low-cost auto insurance program for eligible drivers designed to help lower-income individuals meet the state’s mandatory insurance requirements.
Allen has said he wants to increase awareness of the program among drivers who qualify.
Kim proposes expanding eligibility for the program in the short term while pursuing a public auto insurance option in the longer term that could make low-cost coverage available to more Californianians.
UC Irvine law professor Shauhin Talesh said the existing program currently covers around 67,000 policies. He argued that expanding the program could substantially change its risk pool — the mix of people whose premiums pay for claims and other expenses.
“A higher-cost risk pool could eventually lead to higher premiums so that’s the most concrete route by which universal eligibility could hurt the existing low-income population,” Talesh said.
Talesh also said expanding eligibility could affect the private market if drivers moved out of conventional policies.
The effects would depend on the details of the program, including eligibility, coverage limits, pricing and how costs were distributed.
The current low-cost program generally serves drivers whose household income is no more than 250% of the federal poverty level — along with other eligibility requirements. Talesh noted that the commissioner could not simply remove those rules through an administrative order because they are established in state law.
Wildfire risk complicates decisions about where California builds
The insurance crisis is also tied to California’s housing shortage and the growing risk of wildfires.
Allen has called for avoiding new development in areas at high risk of wildfire and carefully encouraging people to move away from some of those areas. He also wants state and local officials, builders, firefighters and insurers to work together on reducing risks at the community level.
Judd Boomhower, an economist at UC San Diego who studies climate risks and natural disasters, has researched how insurance markets are adapting to climate change. He said the commissioner cannot directly control local zoning decisions.
“As far as I know the Department of Insurance doesn’t have any ability to directly regulate where development happens or how zoning works,” Boomhower said. “I would think that those are all either local questions or potentially state of California or other agencies.”
Kim has argued that restricting construction in some high-risk areas will not eliminate the threat to existing communities as wildfire danger grows and changes over time.
Boomhower said there is an important difference between deciding whether to build a new community in a fire-prone area and asking people to leave neighborhoods that already exist.
“Even in the highest-risk part of California, the probability that a neighborhood is going to face a severe fire in a given year is, of course, higher than we’d like it to be, but it’s not a given that next year a fire is going to burn through these communities,” Boomhower said. “It’s a different calculation if you’re thinking about putting a bunch of money in now to build a new community in a place where nobody currently lives.”
Boomhower added that a home’s vulnerability depends not only on the choices of an individual homeowner, but also on surrounding homes, vegetation and whether fire can spread through a neighborhood.
Voters will decide between the two approaches in the Nov. 3 general election. Whoever wins will likely need to work with lawmakers and other state and local officials to carry out their proposals.