Why Home Insurance Rates Are Rising in California

Introduction

If your homeowners insurance premium just went up, you’re not alone. Across California, homeowners are seeing sharp increases in their insurance rates—and it’s not just inflation.

In 2025, a combination of environmental, economic, and industry factors is driving the cost of coverage higher than ever before. But understanding why this is happening can help you make smarter insurance decisions—and potentially save hundreds of dollars per year.

This article explains the top reasons home insurance rates are rising in California, what it means for LA-area homeowners, and how eWay Insurance helps you stay covered without overpaying.

1. Wildfire Risk Continues to Climb

Wildfires have become a near-constant threat across California. Even if your home isn’t in a fire zone, insurers are raising premiums statewide to account for the massive costs of past and potential future fires.

Key wildfire impacts:

• Billions in insured losses in recent years
  
  
• Increased underwriting restrictions in high-risk ZIP codes
  
  
• Some insurers withdrawing or limiting new policies in fire-prone areas
  
  

How eWay Insurance helps:
We work with insurers that still write policies in wildfire zones and compare FAIR Plan alternatives when needed.

2. Inflation and Rising Construction Costs

Rebuilding a home after a fire, storm, or water damage now costs significantly more than it did just a few years ago. Higher prices for:

• Lumber and building materials
  
  
• Labor shortages
  
  
• Supply chain delays
  
  

All of this means higher replacement cost values, which drive up insurance premiums—even if you haven’t filed a claim.

eWay’s solution:
Our agents ensure your home’s replacement cost estimate is accurate—not inflated—and adjust coverage to avoid unnecessary over-insuring.

3. More Severe Weather Events

California isn’t just dealing with wildfires. 2023 and 2024 brought record rainfall, mudslides, and flooding in parts of the state—especially in southern coastal counties.

Even though floods and earthquakes aren’t covered by standard home insurance, these risks still influence rates as insurers look at overall catastrophe exposure.

4. Insurance Market Instability

Several major insurance companies have:

• Left the California market
  
  
• Paused writing new policies
  
  
• Increased underwriting requirements
  
  

Why? They claim that rising losses and strict regulations make the state unprofitable. With fewer carriers competing, remaining companies raise rates to manage risk.

How eWay Insurance helps:
We have access to a broad network of regional and surplus-line insurers who still actively serve California—even in high-risk or hard-to-insure ZIP codes.

5. Claim Frequency and Litigation

California has one of the highest rates of property claims and lawsuits in the country. Even claims unrelated to wildfires—like water damage, theft, and liability suits—are occurring more frequently.

More claims = more losses for insurers = higher premiums for everyone.

6. Regulatory Delays and Restrictions

California’s Department of Insurance tightly regulates how and when companies can adjust rates. Ironically, these protections sometimes delay necessary rate changes, causing insurers to suddenly spike prices when increases are finally approved.

7. Reinsurance Rates Have Skyrocketed

Reinsurance is the insurance that insurance companies buy to protect themselves. In 2024 and 2025, global reinsurance costs rose significantly—due to natural disasters worldwide. These added costs trickle down to California policyholders.

What You Can Do About Rising Rates

Even though you can’t stop insurance premiums from increasing, you can take steps to lower your personal cost:

• Shop around regularly: Rates vary drastically between companies. eWay Insurance compares over 80 carriers to find the lowest available premium for your home.
  
  
• Bundle policies: Save by combining home and auto insurance under one carrier.
  
  
• Adjust deductibles: Higher deductibles mean lower monthly premiums (just ensure it’s affordable if you file a claim).
  
  
• Ask about discounts: For fire-resistant roofing, alarm systems, gated communities, or claim-free history.
  
  
• Review coverage annually: eWay Insurance provides free yearly reviews to update coverage, verify rebuild costs, and apply new discounts.
  
  

Frequently Asked Questions

1. Why did my homeowners insurance premium go up in 2025?
It’s likely due to rising wildfire risk, increased rebuild costs, and changes in the insurance market. Even if you didn’t file a claim, statewide trends affect your rate.

2. Can I fight a rate increase?
You can appeal with your insurer, but the best way to save is by shopping around. eWay Insurance can instantly compare dozens of policies to find a better rate.

3. Are some insurers leaving California?
Yes, a few large carriers have paused or reduced coverage availability. eWay works with companies that are still active and competitive in the state.

4. Will bundling home and auto lower my premium?
Yes—most carriers offer 10–25% discounts for bundling. eWay Insurance looks for bundle deals across multiple companies.

5. Does home insurance cover wildfires and earthquakes?
Wildfire is usually covered unless excluded. Earthquake coverage must be purchased separately. eWay can help you add it if needed.

6. What if I can’t find an insurer in my ZIP code?
You may qualify for the California FAIR Plan or a surplus lines insurer. eWay can guide you through those options and explain the pros and cons.

Final Thoughts

Home insurance in California is getting more expensive—but understanding why gives you the power to respond wisely. Whether you live in Los Angeles, San Bernardino, or anywhere in between, you don’t have to accept your insurer’s rate increase without question.

eWay Insurance helps homeowners navigate rising premiums by comparing quotes from dozens of providers, securing hard-to-find coverage, and applying every available discount. They advocate for your protection and your pocketbook.

Call (323) 749‑5400 or fill out our free quoting tool to compare rates and explore your options today.