Key Takeaways

• State Farm is proposing a limited return centered on homes meeting verified IBHS wildfire-mitigation standards, while Allstate’s return remains tied to regulatory approval.
• California homeowners can prepare now for the IBHS Wildfire Prepared Home process, which requires physical mitigation work, a $125 application fee and independent verification.
• Neither insurer is writing new California homeowners business yet, and regulators are pressing for broader availability.

By Samuel López | USA Herald

CALIFORNIA - State Farm and Allstate are taking steps toward selling new homeowners policies in California again, years after wildfire losses, reconstruction inflation and reinsurance costs reportedly drove major carriers to restrict new business.

State Farm General stopped accepting new California property applications in May 2023, citing construction costs rising faster than inflation, growing catastrophe exposure and a difficult reinsurance market. Allstate had already stopped writing new homeowners policies in November 2022, citing wildfire exposure, higher repair costs and reinsurance premiums.

Now the direction is beginning to change.

State Farm filed updated guidelines September 16 that would let it consider new applications from homes carrying an Insurance Institute for Business & Home Safety Wildfire Prepared Home designation. Homes earning the higher Enhanced designation could be considered statewide, regardless of wildfire-risk area, if they also satisfy State Farm’s normal underwriting rules. Homes with this designation could be considered in low- and moderate-wildfire severity areas. The filing says State Farm would cap new policies at about 7,500 annually.

That ‘normal underwriting’ language matters. The IBHS designation would not guarantee a State Farm policy. State Farm has not published a new detailed checklist of every ordinary underwriting factor in this announcement, so the designation should be viewed as an eligibility gateway, not automatic approval.

For homeowners hoping to position themselves early, Wildfire Prepared Home is not a class. It is a voluntary property-standard and verification program. The Essential level focuses on ember resistance through measures such as a five-foot noncombustible zone around the home, a Class A roof, ember-resistant vents, noncombustible gutters and defensible-space work. Enhanced adds stronger protections against direct flames and radiant heat, including more demanding standards for siding, windows, decks and nearby structures.

Homeowners complete the work first, submit photos, pay a $125 nonrefundable application fee and undergo an independent in-person evaluation. If approved, IBHS issues a digital certificate. The designation lasts three years, with photo-based reviews after years one and two to maintain active status. The mitigation work itself can cost much more than the application fee, depending on the property.

Allstate’s path back is different. Its August 31 filing seeks an overall 1.4% rate increase and, if approved, would require the company to write at least 2,064 new policies in state-designated distressed areas by July 2029. California regulators say they will continue discussions with Allstate about reopening at a larger scale. That wording is significant: the filing represents a return, but not necessarily the broad restoration of capacity state officials are seeking.

State Farm also said it is encouraged by recent legislative efforts to make mitigation more affordable. The company did not identify a particular bill. One clear example is SB 894, which passed both legislative chambers and was sent to Gov. Gavin Newsom on September 2. It would create a California Wildfire Resilience Loan Program, subject to funding, to help finance home hardening and defensible-space improvements. California also operates a Wildfire Mitigation Program providing financial assistance for resilience work in vulnerable communities.

The renewed activity comes with a legal backdrop. Consumer Watchdog sued Insurance Commissioner Ricardo Laraand the Department of Insurance in 2025 over rules allowing insurers to pass part of California FAIR Plan assessments to policyholders. The organization argued the surcharges could shift hundreds of millions of dollars in insurer obligations onto consumers. A Los Angeles Superior Court judge upheld the framework on July 1, 2026; Consumer Watchdog said afterward that it was considering an appeal.

For California homeowners, the practical message is encouraging but limited. Neither insurer is accepting new homeowners business under these plans yet. People in wildfire-prone areas who want to improve their position can focus now on documented home hardening, defensible space and verifiable mitigation. The insurers are moving back cautiously, and the next question is how much new coverage their return actually produces.

ABOUT THE AUTHOR

Samuel López is an independent reporter for USA Herald and has reported for the publication since 2022. A seasoned legal professional with more than two decades of experience in litigation support, legal research, case analysis and high-level legal drafting, López brings a legal and insurance-focused lens to complex regulatory, court and consumer issues.

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