A California homebuyer who thought he was closing on a suburban house instead found himself forced onto a little-known insurance policy with a $25,000 fire deductible.

His experience shows how the state’s home insurance crisis has spread beyond remote mountain communities and heavily wooded wildfire zones.

Here’s what to know

According to the Los Angeles Times, tech worker Alex Hwang could not get a standard insurer to provide the coverage his mortgage lender demanded as he tried to buy a nearly $700,000, six-bedroom home in Menifee’s Cimarron Ridge development. He ultimately relied on a surplus-lines policy with a $25,000 deductible for fire claims.

Cimarron Ridge is bordered by scrub and rolling hills, not the dense forest many people associate with California’s worst wildfire danger.

Hwang told the Los Angeles Times he felt boxed in by the market. “I hate the $25,000, but I didn’t really have a whole lot of choice. None of the big-name insurance companies were writing,” he said.

He told the Los Angeles Times that the insurer itself was unfamiliar to him, saying, “I call it ‘no-name insurance,’ because I have never heard of these people.”

More background

In a Los Angeles Times review of 396 ZIP codes, low-risk homes accounted for 90% of the policies added to the California FAIR Plan between March 2025 and June 2026. That stretch brought more than 11,000 additional low-risk properties onto the insurer of last resort, which already covered 138,000 such properties.

Homeowners who cannot find private coverage can fall back on the California FAIR Plan, the state’s insurer of last resort. But the protection is limited: it generally covers only fire, leaving homeowners to seek separate coverage for theft, water damage, and other common hazards.

Wildfire-related losses, rising construction costs, and more expensive reinsurance have prompted major insurers to scale back in California. As they pull back, surplus-lines insurers that operate outside many of the state’s usual insurance regulations are increasingly filling the void.

For another Riverside County buyer identified only as Louis, the process also became stressful. After conventional carriers declined to cover him and his wife, they ended up purchasing a policy with a $14,000 fire deductible.

What’s being done?

California has introduced insurance reforms to encourage insurers to issue more policies in wildfire-distressed areas while allowing them to factor catastrophe models and reinsurance costs into their decisions.

The California Department of Insurance has pointed to the scale of major fires since 2015 and growing climate-related risks as major strains on the insurance market. Meanwhile, the Los Angeles Times found FAIR Plan enrollment around Menifee was up fivefold from 2024 levels, while neighboring Hemet posted a 660% increase.

At the same time, surplus-lines insurers have expanded rapidly, growing from about 1% of California’s home insurance market in 2021 to roughly 7%, according to Weiss Ratings. The shift can leave families with steep deductibles and unfamiliar providers.

Where can I learn more?

The pressures behind this Riverside County home purchase are playing out across California and other western states, including insurer pullbacks and the growing fallout for homeowners trying to keep coverage.

• In Los Angeles, thousands of homeowners were dropped before the Palisades Fire hit.

• In California, a major insurer stopped offering policies to new homeowners altogether.

• In Nevada, homeowners found they can’t get insurance after carriers abruptly halted coverage.

• In New Mexico, lawmakers say catastrophic fires are reshaping the future of homeownership.

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