State Farm has asked California regulators for permission to sell new home insurance again, three years after it stopped. It filed updated underwriting guidelines on 16 September 2026 covering certified wildfire-resilient homes, capped at about 7,500 applications a year. State Farm California home insurance stays closed until the filing is approved.
What State Farm Filed on 16 September 2026
The filing is a change to underwriting guidelines, not a rate application. It went to the California Department of Insurance, the state agency that must approve insurers’ rates and rules before they take effect.
State Farm General, the company’s California property insurer, described the change on its own site as a move to “allow State Farm General to consider new insurance applications for homes with qualifying Wildfire Prepared Home designations”. The company stopped accepting new applications for home and business property cover in California on 27 May 2023.
Two numbers define the scale of the reopening. The company has capped new home insurance applications at roughly 7,500 a year, and it expects to begin accepting them in December 2026 if the department signs off. Neither State Farm nor Allstate is taking applications now.
Which Homes Would Qualify for State Farm California Home Insurance
Eligibility turns on a certificate issued by a third party, not on the postcode alone. The Wildfire Prepared Home programme is run by the Insurance Institute for Business & Home Safety, a research non-profit funded by the insurance industry, and it certifies homes that have taken specified steps to reduce ember and flame exposure.
The programme has two levels, and the filing treats them differently.
| Certificate held | Where the home could be considered |
|---|---|
| Wildfire Prepared Home – Enhanced | Anywhere in California, regardless of the wildfire severity zone, if the home otherwise meets State Farm’s underwriting rules |
| Wildfire Prepared Home – Essential | Only in areas rated low or moderate for wildfire severity, again subject to normal underwriting |
| No certificate | Not eligible under this filing |
Two limits are worth stating plainly. A certificate makes a home eligible for consideration; it does not oblige the insurer to offer a policy, because the company’s ordinary underwriting rules still apply. And because the annual cap is about 7,500 applications statewide, eligibility will not translate into cover for every certified home. California has roughly 14 million housing units.
What Allstate Filed, and What It Would Owe in Return
Allstate moved first, on 31 August 2026, and its filing is structured differently: it pairs a rate request with a coverage obligation.
- Rate request: An overall increase of 1.4 percent on its California homeowners book.
- Coverage commitment: If approved, Allstate would be required to write at least 2,064 new policies in areas the state designates as distressed, by July 2029.
That trade sits inside the Sustainable Insurance Strategy, the framework Insurance Commissioner Ricardo Lara has built over recent years. It lets insurers reflect catastrophe modelling and reinsurance costs in their rates in exchange for commitments to write more business in underserved areas. Both filings remain under departmental review, and the department has not published a decision date for either.
The FAIR Plan Increase That Takes Effect First
For homeowners who cannot get private cover today, the nearer-term change is a price rise rather than a reopening. The California FAIR Plan is the state’s insurer of last resort, a shared pool that sells basic fire cover to people private insurers have turned down.
- Increase approved: 29.1 percent on average, against the 35.8 percent the plan requested.
- Effective date: 15 October 2026, for new and renewing policies.
- Policyholders affected: More than 675,000.
- Distribution: The wildfire portion of the premium drives most of the rise, so homes in high-risk areas face steeper increases and some lower-risk policyholders will see a reduction. The 29.1 percent figure is an average and not an individual’s bill.
The plan’s total exposure stood at about $768 billion, some 11 percent higher than in September 2025, and its share of California homes has risen to roughly 5 percent from under 2 percent. New business coming into the plan was down about 25 percent year on year, which the department has pointed to as evidence that private capacity is returning.
The Claims Case State Farm Has Not Yet Answered
The reopening request arrives while the same company is contesting a state enforcement action over how it handled claims from the January 2025 Los Angeles wildfires. Nothing in that case has been decided.
In May 2026 the Department of Insurance filed an Accusation and Order to Show Cause against State Farm General following a market conduct examination — a regulator’s audit of an insurer’s claims practices. The department alleged 398 violations identified in that examination and 34 more drawn from consumer complaints, under the state’s Unfair Insurance Claims Practices Act. Under section 790.035 of the California Insurance Code, penalties can reach $5,000 for each violation, or $10,000 where a violation is found to be wilful.
These are allegations at an early stage, not findings. An Accusation is the first step towards a public hearing before an administrative law judge, and State Farm has not been found liable of anything. The department said State Farm policyholders filed about 11,300 residential claims from those fires, out of 38,835 across all insurers.
State Farm’s own account of why it withdrew rests on loss figures: the company says that over nine years it paid $1.26 in claims for every premium dollar collected in California, producing cumulative losses above $5 billion.
What Has to Happen Before Any New Policy Is Written
- Departmental review: The California Department of Insurance examines each filing. No decision date has been announced for State Farm’s or Allstate’s.
- Approval or amendment: The department can approve, reject or require changes, as it did with the FAIR Plan request it cut from 35.8 percent to 29.1 percent.
- Certification by the homeowner: A property needs an Insurance Institute for Business & Home Safety Wildfire Prepared Home designation before it can be considered under State Farm’s rules.
- Company reopening: State Farm has indicated December 2026 as the point at which it would begin accepting applications, conditional on approval.
- Individual underwriting: Each application is still assessed against the insurer’s own rules, and the annual cap applies.
Homeowners looking for the authoritative position on any of this can consult the California Department of Insurance’s own filings record and the Insurance Institute for Business & Home Safety’s designation requirements, rather than third-party summaries. Everything described here applies to California only; rules, rates and availability differ in every other state, and this site’s coverage of Washington’s wildfire insurance protections shows how differently a neighbouring state handles the same risk.
What Is Still Undecided
- Whether either filing is approved: Both were pending as of 20 September 2026, with no published decision date.
- How many homes hold a certificate: Neither the insurer nor the institute has published a current California count of Wildfire Prepared Home designations.
- What a new policy would cost: The 16 September filing changes underwriting rules, not prices; State Farm’s California homeowners rates are set by separate filings, and a recent example is the 1.5 percent increase Farmers applies at each renewal.
- The outcome of the enforcement action: No hearing date before an administrative law judge has been made public.
- Whether other insurers follow: No further carrier had filed a comparable reopening plan at the time of writing.
Frequently Asked Questions About State Farm California Home Insurance
Is State Farm Writing New Home Policies in California Now?
No. As of 20 September 2026 State Farm General is not accepting new California home insurance applications. It filed updated underwriting guidelines on 16 September 2026 and has indicated December 2026 as a possible start date if the California Department of Insurance approves them.
Which Homes Would Be Eligible?
Only homes holding a Wildfire Prepared Home designation from the Insurance Institute for Business & Home Safety. Homes with the Enhanced designation could be considered anywhere in California; homes with the Essential designation only in low- and moderate-wildfire-severity areas. Normal underwriting rules still apply in both cases.
How Many New Policies Would State Farm Write?
The filing caps new home insurance applications at about 7,500 a year statewide. Eligibility does not guarantee an offer of cover.
How Much Is the California FAIR Plan Increase?
The California Department of Insurance approved an average increase of 29.1 percent, down from the 35.8 percent the FAIR Plan requested, effective 15 October 2026 for more than 675,000 policyholders. It is an average: high wildfire-risk homes face larger rises and some lower-risk policyholders will pay less.
Has State Farm Been Penalised Over Los Angeles Wildfire Claims?
No. In May 2026 the California Department of Insurance filed an Accusation alleging 398 violations from a market conduct examination and 34 from consumer complaints. That is the first step towards a hearing before an administrative law judge, and no finding of liability or penalty has been made.
