Category: Fire

Homeowners and buyers across Southern California are struggling to secure basic fire insurance, being denied coverage, losing out on deals, and facing lenders demanding insurance requirements or limits the buyer cannot obtain. In an attempt to help homeowners and buyers, and in response to the 2025 Palisades and Eaton fires, the state legislature introduced new insurance‑related bills that aimed to address these issues. These wildfires displaced thousands and exposed just how fragile California’s insurance market has become. While lawmakers have framed the bills as meaningful relief, the practical impact is limited.

For many people trying to purchase or keep a home in high‑risk areas, the legislation does not address the real problem: carriers are unwilling to write policies in entire zip codes, and are leaving the state. This limits the number of insurance providers which makes accessing fire insurance coverage more difficult than ever.

Volume 1 of our 3 part series focuses on the three bills most frequently discussed in the recent legislative session movement: AB 1, AB 226, and SB 525. Each proposes improvements on paper, but none resolve the core issue facing today’s buyers and homeowners. Insurance availability has become a major obstacle to purchasing, financing, and maintaining a home in Southern California. Even buyers who meet lender requirements and complete mitigation steps are finding that carriers will not quote, bind, or renew policies. These bills offer helpful adjustments, but they are far from fixing the structural failures of California’s fire‑insurance market.

AB 1: Wildfire Risk Regulations and Mitigation Requirements

AB 1 directs the Department of Insurance to update and expand wildfire‑mitigation standards statewide. Some of these standards relate to property‑level hardening and community‑level mitigation planning. Although this may eventually support premium relief, the bill does not address the primary barrier for buyers.

The problem is not only high premiums as insurers are declining to write new policies or renew policies in many San Diego area zip codes, regardless of the mitigation steps taken by the homeowner. A homeowner may comply with every recommended home hardening measure yet still be denied coverage. AB 1 improves regulatory guidance, but it does not require carriers to issue new policies, even when mitigation work is completed.

AB 226: Bonding Authority for the FAIR Plan

The FAIR Plan provides basic fire insurance coverage for high-risk properties when traditional insurance companies will not.  AB 226 authorizes the FAIR Plan to use state bonding to stabilize its finances after major loss events such as the Palisades and Eaton fires.

This measure responds to the pressure placed on the FAIR Plan as claims increased and its reserves were strained. Expanding bonding authority is sensible, but it does not expand coverage limits or meaningfully broaden available policy types. FAIR Plan policies remain limited in scope and are often insufficient for homeowners with moderate or higher replacement costs. Buyers relying on the FAIR Plan still face the burden of trying to secure costly supplemental coverage from a limited pool of high-risk insurers.

SB 525: Manufactured Home Coverage Parity

SB 525 requires that manufactured and mobile homes be insured under the same terms available to site‑built homes under the FAIR Plan. This corrects an inequity but does not change the broader availability crisis. While coverage parity is valuable, the FAIR Plan remains a limited and last‑resort product. Many policyholders still face partial coverage, reduced protections, and uncertain renewals year to year. They are also potentially faced with the additional financial burden of covering expenses beyond what insurance covers in the event of a loss.

Why These Bills Are Not the Long‑Term Solution Homeowners Need

Although these measures represent an effort to respond to mounting public pressure, they do not solve the issues that matter most during a real estate transaction. For buyers who must secure fire insurance to satisfy lender requirements or for their own protection, the core barrier is not only cost but availability. In many high‑risk zones, lenders are increasingly requiring excess coverage, endorsements, or supplemental private policies that no carrier will issue at a reasonable rate.

Some buyers are now facing scenarios where partial self‑insurance becomes the only option available, even though it is not a viable underwriting solution for most conventional loans. These conditions have made it significantly harder for buyers to close transactions and for homeowners to maintain stable coverage.

The recent legislative roll-outs function more like an administrative patch than a structural reform. Premium volatility continues, carriers are still restricting new business and leaving the state, and homeowners remain unsure as to what their policies truly cover. These gaps leave buyers and homeowners confused about their options and sellers vulnerable to failed escrows when insurance cannot be found in time.

In Upcoming Volumes

This volume sets the foundation for a more realistic review of California’s insurance reforms. The next volumes will cover the issues that are already affecting real estate transactions throughout San Diego County.

Volume 2 will break down the newest C.A.R. wildfire‑disclosure forms, their practical effect in a transaction, and the misunderstandings occurring between buyers, sellers, agents and government entities.

Volume 3 will examine insurer withdrawals from the California market, increased lender scrutiny during underwriting, and the growing trend of buyers being required to partially self‑insure to secure financing.

Sources

1. Law360 summary of new insurance bills affecting Los Angeles fire survivors
2. California legislative summaries for AB 1, AB 226, and SB 525
3. Post‑Palisades and Eaton wildfire reporting on FAIR Plan strain and market instability

Need Legal Advice?

If you’re a landlord or a tenant impacted by fires in San Diego, contact Hoffman Forde today at (619) 614-2170 or intake@hoffmanforde.com.

Disclaimer

The information in this post is considered attorney advertising under applicable California law. The contents of this post are for informational purposes only and do not constitute legal advice. The information may be incomplete or out of date. No representations, testimonials, or endorsements on this website constitute a guarantee, warranty, or prediction regarding the outcome of any legal matter.

California created a multi‑billion‑dollar Wildfire Fund to steady the system when utility equipment is blamed for catastrophic blazes. In 2026, lawmakers are signaling that the program’s design could shift, changes that may find their way into utility bills, insurance options, and home finances for everyday homeowners.

Below, you’ll find an explanation of how the fund works, why lawmakers are considering updates now, and what steps you can take to protect your household budget.

What the Wildfire Fund Is and Why It Exists

When a major wildfire is tied to power‑line equipment failures, losses can climb into the billions. To avoid a repeat of past utility company insolvencies and to speed up payments to victims, California assembled a $21 billion pool, financed half by utility company shareholders and half by a continuing charge on customer electric bills. The fund’s intent was to allow for consumer claims to be paid without pushing a utility company into insolvency.

The fund as structured remains a cornerstone of California’s wildfire‑liability strategy, even as the state faces more frequent and higher‑cost fire seasons.

Why 2026 Could Bring Big Changes

In January 2026, a bill was introduced to position the Legislature to rework or even replace the current fund after a state report is generated and received by lawmakers this spring. The goal is to act on the report’s recommendations, which are expected to evaluate the fund’s adequacy and alternative models for paying wildfire losses.

Separately, policymakers have publicly discussed additional contributions to bolster the fund, including the idea of extending customer surcharges for years beyond their current timeline, an approach that drew pushback from consumer advocates and utility company investors alike.

What this means for homeowners: The state is actively reassessing who pays, how much, and through which mechanisms, issues that impact monthly bills and insurance dynamics.

How the Fund Functions Today (and Where Homeowners Fit In)

• First layer of cost: If a utility company is found responsible for a wildfire, it must cover an initial portion of damages before tapping the fund (a structure designed to keep utility companies accountable).
• Shared financing: Customer surcharges supply roughly half the fund; utility company shareholders supply the other half. If the surcharge under‑collects, utility companies can seek higher rates to meet statutory obligations.

For homeowners, the practical effect shows up on electric bills and, indirectly, in the stability of the insurance market, which watches the fund closely when pricing risk.

What Homeowners Should Expect Next

1) Pressure on Utility Bills

If lawmakers extend or expand surcharges, or if utility companies request rate adjustments to meet statutory funding levels, monthly bills can rise. Past proposals would have added billions in new contributions, split between customers and utility company shareholders, primarily by prolonging the existing customer charge. Build a cushion in your budget for the possibility of higher electricity costs.

What to do now:

• Review your bill’s line‑item surcharges quarterly.
• If you’re on a variable rate plan, compare alternatives and time‑of‑use schedules.

2) Shifts in Home Insurance Availability and Pricing

Insurers track whether California’s liability framework looks predictable and well‑funded. If the fund appears thin relative to catastrophic risk, insurers may restrict new policies or raise premiums, particularly in higher‑risk areas, like much of San Diego County. A resilient fund, by contrast, can support market stability and faster victim payouts after a disaster.

What to do now:

• Ask your carrier which home‑hardening or defensible‑space steps reduce premiums.
• Keep digital records (photos, receipts) of mitigation work; this helps during renewals and home sales.

3) More Robust Mitigation Expectations

If the state concludes that paying for losses alone isn’t sustainable, lawmakers may double down on prevention, tightening defensible‑space and building‑materials standards statewide, mirroring the local wave of tougher rules many cities (including San Diego) are adopting for 2026–2027. Expect stronger inspection programs and closer alignment with updated fire and urban building codes.

What to do now:

• Prioritize upgrades with outsized risk reduction: ember‑resistant vents, Class A roof, non‑combustible 0–5 ft perimeter.
• Schedule annual vegetation maintenance ahead of peak season.

4) Possible Rebalancing of “Who Pays”

Depending on the 2026 report and legislative negotiations, the cost of wildfire losses could tilt toward utility company shareholders and customers. Each option touches your finances differently: more onto ratepayers means higher bills; more onto insurers can translate into premium hikes; more onto utility companies might affect reliability investments or shareholder negotiations.

What to do now:

• Follow bill updates through the spring; major shifts usually include timelines and implementation dates that affect household budgets.

5) Real‑Estate Implications

Buyers and appraisers are paying closer attention to wildfire resilience. Expect more questions at sale about roof class, vents, siding, defensible space, and local compliance letters, factors that can influence time on market and price.

What to do now:

• Keep a simple “Wildfire Readiness” file with invoices, before/after photos, and inspection results.
• If selling, complete key mitigation projects pre‑listing to reduce buyer friction.

FAQ for Homeowners

Will my electric bill definitely go up this year?
Not guaranteed but it’s possible. Lawmakers are weighing options that include extending the existing surcharge, and utility companies can request adjustments if collections lag. Track the legislative calendar and any formal rate cases that apply to your service area.

Could my home insurance be affected even if I’m nowhere near a forest?
Yes. Insurers price statewide portfolio risk. The perceived strength of the Wildfire Fund and the predictability of liability rules can influence underwriting across regions, not just in high‑fuel zones.

What state actions should I watch?
Two milestones: the spring 2026 report evaluating new approaches, and the Legislature’s response under the bill introduced in January 2026. Those decisions will clarify cost‑sharing and timelines.

Stay updated on our blogs where we will soon release a 3- part series on bills that have changed the wildfire fund as of late 2025, C.A.R wildfire disclosure forms, and insurer withdrawal from the California market.

Need a Consult?

Contact Hoffman & Forde today at (619) 546-7880 or intake@hoffmanforde.com. Our firm’s attorneys offer clear, strategic guidance to help with your legal problems.

Disclaimer

The information in this post is considered attorney advertising under applicable California law. The contents of this post are for informational purposes only and do not constitute legal advice. The information may be incomplete or out of date. No representations, testimonials, or endorsements on this website constitute a guarantee, warranty, or prediction regarding the outcome of any legal matter.

San Diego is rolling out major wildfire‑prevention rules in 2026 that will reshape how residents maintain their homes and yards. With extreme fire conditions becoming more common, the city is tightening standards to reduce the risk posed by wind‑driven embers, a leading cause of home ignitions during wildfires.

Below is a clear guide for what homeowners need to know, covering when the rules take effect, how enforcement will work, and who will be most affected.

What Are San Diego’s New “Zone Zero” Fire Safety Requirements?

San Diego’s new regulations focus on the first five feet surrounding a home, a high‑risk zone where embers can easily ignite nearby materials. To reduce this threat, the city will prohibit any combustible materials within this five‑foot perimeter in designated fire‑hazard areas.

Materials that will no longer be allowed in this zone include:

• Wood fences or trellises
• Wood shake/ shingle roofs
• Sheds
• Flammable shrubs, flowers, and small trees
• Organic mulch, grass, and synthetic turf

These requirements apply to areas labeled “very high fire hazard severity zones,” which include roughly two‑thirds of San Diego’s homes. This ranges from suburban communities like Scripps Ranch and Carmel Valley to dense urban neighborhoods such as Downtown and Hillcrest.

The new rules stem from statewide legislation (AB 3074), and California’s forestry officials are expected to finalize additional details, including potential plant exemptions, soon.

When Will the New Fire Safety Rules Take Effect?

San Diego is phasing in the requirements on two different timelines:

• February 2026 — All newly constructed homes must comply
• February 2027 — All existing homes must comply

City fire officials confirmed that these deadlines are meant to help residents and builders adjust while still moving quickly to reduce risk.

Rental properties face tighter timelines under the city’s accelerated implementation schedule, with immediate compliance required once the ordinance is officially active.

How Will the City Enforce the New Requirements?

San Diego plans to roll out enforcement gradually, focusing first on awareness rather than penalties. With limited staffing, city officials have emphasized education as the primary tool during the early stages.

1. Emphasis on Homeowner Outreach

Residents can request voluntary home‑risk assessments, where fire‑risk evaluators walk the property and explain how to meet the new standards, from roofing materials to vegetation placement.

2. Insurance‑Driven Compliance

While city enforcement will ramp up slowly, homeowners may still feel pressure to comply sooner. Insurers may begin requiring proof of compliance before issuing or renewing coverage, especially given rising wildfire‑related claims statewide.

3. Integration with 2026 Fire Code Updates

These rules will work in tandem with the updated 2025 California Fire Code and Wildland‑Urban Interface Code, both of which become effective locally on January 1, 2026.

Who Will Be Affected by the New Fire Rules?

Because San Diego’s high‑risk zones cover about two‑thirds of the city, most homeowners will be impacted. This includes:

• Suburban neighborhoods with a history of wildfire exposure
• Urban areas that have recently been found vulnerable due to ember spread
• Owners of existing properties, who must comply by 2027
• Landlords, who may need immediate compliance depending on property type
• Homeowners in multi‑jurisdictional regions, where rules may vary across county and city lines

fig. 1

What San Diego Homeowners Should Do Now

To prepare for the new rules and avoid insurance or compliance headaches, homeowners should begin planning early. Here are practical next steps:

1. Inspect the first five feet around your home

Look for lumber, fencing, flammable plants, or storage items that will need to be removed.

2. Budget for landscape or structural updates

Costs may vary, but early preparation helps avoid last‑minute expenses once enforcement begins.

3. Request a home‑risk assessment

These evaluations offer tailored guidance and can help homeowners understand exactly what must change.

4. Track updates to statewide wildfire funding

Changes to the California Wildfire Fund may influence insurance premiums or mitigation requirements over time.

Need Legal Advice?

If you’re a landlord or a tenant concerned by these new rules, or impacted by fires in San Diego, contact Hoffman Forde today at (619) 546-7880 or intake@hoffmanforde.com.

Disclaimer

The information in this post is considered attorney advertising under applicable California law. The contents of this post are for informational purposes only and do not constitute legal advice. The information may be incomplete or out of date. No representations, testimonials, or endorsements on this website constitute a guarantee, warranty, or prediction regarding the outcome of any legal matter.

fig. 1 - City of San Diego