A split-screen image comparing Florida and California insurance models. The left side shows a hurricane approaching Florida’s coastline with the text ‘Hurricane Insurance in Florida,’ while the right side shows a California wildfire burning near homes with the text ‘Wildfire Insurance in California?’ Overlay text reads: ‘Could a Florida-Style Insurance Model Work for Wildfires?’

Can a Florida-Style Hurricane Insurance Model Work for California Wildfires?

February 10, 2025•4 min read

The California homeowners insurance market is in crisis. With wildfires becoming more frequent and severe, major insurance carriers like State Farm have paused new policies, requested steep rate increases, or pulled out of high-risk areas altogether. As a result, many homeowners are struggling to find affordable coverage or are being non-renewed altogether.

This raises an important question: Should California adopt a model similar to Florida’s approach to hurricane insurance? Would separating wildfire coverage from standard homeowners policies make insurance more accessible and affordable? Let’s take a closer look.

The Current Insurance Crisis in California

California has experienced record-breaking wildfires in the last decade. From the 2018 Camp Fire, which wiped out the town of Paradise, to the 2023 Maui Fires, which shocked even non-mainland territories, the risk of property destruction is growing.

Insurers are responding by either leaving the market, raising premiums, or tightening their underwriting guidelines. As of 2024:

State Farm, Allstate, and Farmers have restricted new policies in wildfire-prone areas
California FAIR Plan enrollment has skyrocketed, with more homeowners resorting to the "insurer of last resort"
Home insurance premiums have increased by as much as 20-30% in high-risk zones

The reality is that insurers are losing billions due to fire-related claims, and the cost of rebuilding homes has surged due to inflation and supply chain issues.

A detailed map of California highlighting high-risk wildfire zones, with red and orange shading indicating the most vulnerable areas.

How Florida Handles Hurricane Insurance

Florida, which faces severe hurricane risks, has taken a different approach to managing insurance. Unlike California, hurricane coverage is not automatically included in standard homeowners insurance policies. Instead, homeowners must purchase separate hurricane insurance, which comes with:

✅ Higher deductibles – Often 2-10% of the home’s insured value rather than a flat-dollar deductible

✅ Separate hurricane insurance policies – Allows for a lower-cost base policy while only adding hurricane coverage if the homeowner wants it

✅ Incentives for risk mitigation – Discounts for wind-resistant homes or hurricane shutters

This structure reduces the financial exposure of insurers, making them more willing to stay in the market while allowing homeowners to choose their level of coverage.

A news paper with the words Hurricane season on it and a California home near dry, wildfire-prone land on the right.

What If California Used a Similar Model for Wildfires?

Instead of requiring fire insurance as part of every homeowners policy, California could adopt a Florida-style approach, where wildfire coverage is separate.

🔥 A lower-cost base homeowners policy, excluding wildfire damage
🔥 An optional wildfire insurance policy, available at varying levels of coverage
🔥 Higher deductibles for wildfire claims, reducing overall premium costs

Potential Benefits:

✔️ Lower insurance premiums for homeowners in low-risk areas
✔️ More insurance companies willing to stay in the California market
✔️ Flexibility for homeowners to choose how much wildfire protection they want

A side-by-side comparison of two homes—one severely damaged by a wildfire, with charred remains, and another untouched home surrounded by defensible space and fire-resistant landscaping.

Would This Actually Lower Costs?

While this model sounds promising, there are some challenges to consider:

⚠️ Wildfires spread unpredictably – Unlike hurricanes, which follow a track, wildfires can start anywhere and spread rapidly, making risk assessment more difficult.
⚠️ Would wildfire policies be too expensive? – If separated, wildfire policies could become costly, pricing some homeowners out of coverage entirely.
⚠️ Would insurers return to California? – Some companies have left due to state regulations and price controls, not just wildfire risk. Would this be enough to bring them back?

A bar graph displaying the steady increase in homeowners insurance premiums in California over the last 5 years, with a noticeable spike in recent years.

What Homeowners Need to Do Now

Until a new model is introduced, homeowners should:

✅ Review their current policy – Know what’s covered and what’s not
✅ Explore multiple quotes – Work with an insurance broker to find the best options available
✅ Invest in fire mitigation – Some insurers offer discounts for defensible space, Class A fire-rated roofs, and sprinkler systems

📢 Want to make sure you’re properly covered? Give us a call at 559-713-6120, and let’s review your policy together!

A homeowner sitting at a table with an insurance broker, reviewing a policy document together. The homeowner looks focused while the agent explains coverage options

Is It Time for a Change?

With rates skyrocketing and fewer insurance options available, California homeowners need solutions. A Florida-style approach could help keep base insurance costs lower, but would it create new problems in the process?

What do you think? Would a separate wildfire insurance model be a good solution for California? Or would it make coverage even harder to get?

📢 We’d love to hear your thoughts! Drop a comment below or give us a call at 559-713-6120 to discuss your homeowners insurance needs.

🔗 Need a quote or a policy review? Visit home.modernedgeinsurance.com to get started.

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