California Set to Launch First Public Wildfire Model for Home Insurance

When it comes to assessing a home’s wildfire risk in California, a lot of calculating happens behind the scenes. But new legislation aims to change that.

State legislators passed a bill on Sept. 13 to create a publicly available wildfire model that would simulate potential property damage from wildfires and provide more transparency around rate increases. The law doesn’t require insurance companies to use the new state-crafted model. But a public model would give consumers, regulators, and legislators a basis of comparison when evaluating rate increases tied to wildfire risks.

“My bill establishes a public wildfire catastrophe model to simulate property damage from major wildfires,” said California Sen. Dave Cortese, the bill’s sponsor. “This will allow communities and residents [to] understand their property’s risk scores so they can do everything possible to reduce wildfire risks. That will help inform insurance rates and educate communities about wildfire risks.”

The Wildfire Safety and Risk Mitigation Program comes less than a year after the California Department of Insurance began permitting insurance companies to use wildfire models. Such models attempt to understand and predict wildfire behavior by running numerical simulations of wildfire events. Proponents say the models help them better predict future risk.

Since the regulation change in December 2024, two California insurance companies have used models made by private analytics companies to support requests for insurance rate increases, according to reporting by ClimateWire.

“Insurance companies’ private models penalize consumers with higher prices and non-renewals but refuse to explain how they calculate wildfire risk,” said Carmen Balber, executive director of Consumer Watchdog. “Homeowners and renters have a right to information about their own fire risk and the ability to use it to make their homes and communities safer. With SB 429, a fully transparent wildfire model accountable to the public will put power back in consumers’ hands.”

California’s high-risk insurance market

California’s position as the most wildfire-prone state in the U.S. makes it a high-risk market for insurance companies. And some companies have exited or rolled back coverage offerings in the state in recent years.

State Farm and Allstate both left the state’s property insurance market in 2023. California residents have to pay increasingly high costs for homeowners insurance.

As insurers flee and prices increase, many homeowners haven’t been able to find affordable coverage through a private insurance company, turning instead to limited coverage from California’s state-run FAIR Plan. The FAIR Plan had 573,739 policies in place in March 2025, a 23% increase from September 2024. That growth has caused financial strain to the insurer, said Victoria Roach, plan president. She addressed the state’s Assembly Standing Committee on Insurance during an oversight hearing in May.

What’s next? Legislation heads to Gov. Newsom’s desk

California Gov. Gavin Newsom has until Oct. 13 to sign or veto the legislation. His approval would begin the development of the first public wildlife catastrophe model, to be published on the Department of Insurance website.

The department is then responsible to “provide recommendations to the Senate Committee on Insurance, Assembly Committee on Insurance, Assembly Committee on Emergency Management, Budget Committees, and the Governor for future budget allocations related to these provisions before September 1, 2026.”

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