Farmers Insurance Lifts Cap on California Home Policies – A Relief for La Mesa Homeowners

 Good news for La Mesa and San Diego homeowners: Farmers Insurance has announced it will eliminate its cap on new homeowners insurance policies in California, effective immediatelyprnewswire.com. After years of wildfire-fueled turmoil in the insurance market, this move is a welcome sign of stability. For communities like La Mesa, Del Cerro, San Carlos, Mt. Helix, Tierrasanta, Rancho San Diego, Spring Valley, and the City of El Cajon, it could ease the fear of being dropped by your insurer and forced into the expensive California FAIR Plan (the insurer of last resort in our statenbcrightnow.combankrate.com).

California’s Wildfire Insurance Crisis and Why It Matters

Why have so many California homeowners been worried about insurance? In recent years, wildfire risk has soared, and insurance companies have drastically pulled back. Allstate stopped selling new home policies in California in late 2022, and State Farm halted new homeowners policies in 2023foxbusiness.com. Even Farmers (one of the last major insurers still writing in our state) had been rationing new policies – initially capping them at 7,000 per month in 2023, then 9,500 per month by 2024nbcrightnow.com. These cutbacks were a reaction to skyrocketing wildfire losses and costs. Home-rebuilding expenses and reinsurance costs rose far faster than insurers were allowed to raise prices, making California a tough place for insurers to do businessfoxbusiness.com. As a result, many residents faced steep premium hikes, non-renewals, and growing uncertainty about maintaining coveragefoxbusiness.com.

For perspective, a recent analysis found that 1 in 5 homes in California’s highest wildfire-risk areas lost their insurance coverage since 2019prnewswire.com. Over 30,000 households in extreme fire zones have had policies non-renewed in that timeprnewswire.com. When traditional insurers withdraw, homeowners are often left with only the California FAIR Plan as an option. The FAIR Plan provides basic fire insurance when no one else will – but it offers limited coverage and has become increasingly expensive as more people are forced into itbankrate.com. (In fact, the FAIR Plan’s policy count has soared over 100% since 2020 due to the insurance crisisprnewswire.com.) No wonder San Diego County homeowners in fire-prone areas have been on edge about getting dropped by their insurer – losing coverage not only leaves you at risk, but can also jeopardize your mortgage and even the ability to sell your home.

Farmers Insurance Drops the Cap – A Positive Shift

In a move that many interpret as a positive shift, Farmers Insurance is scrapping its limit on new homeowners policies in Californiablog.brickellsold.com. Prior to this change, Farmers had voluntarily capped how many new home insurance policies it would issue (most recently 9,500 per monthprnewswire.com). Now, that cap is gone. Effective Nov 21, 2025, Farmers is “doubling down” on its commitment to California homeowners by opening the doors to unlimited new policies statewideprnewswire.com. This applies to their standard homeowners insurance, condo insurance, and renters policiesprnewswire.com.

Why the sudden confidence? Farmers cites an improving outlook for California’s insurance market thanks to reforms by state regulatorsprnewswire.com. Insurance Commissioner Ricardo Lara’s new Sustainable Insurance Strategy (launched in 2023) is beginning to stabilize the marketfoxbusiness.cominsurancejournal.com. Essentially, the state agreed to expedite reasonable rate increases for insurers and, in return, insurers committed to expand coverage in wildfire-prone areas that they used to avoidinsurancejournal.com. This was designed to stop the exodus of carriers from high-risk regions. Farmers’ latest move is a sign that this strategy is taking hold – it “marks a significant step” toward rebuilding California’s private insurance marketfoxbusiness.com.

From Farmers’ perspective, they’re now able to grow again in California. The company has even filed a proposal for a modest 6.99% average statewide rate increase (to help cover the higher risks) and plans to boost its home–auto bundling discount from 15% to 22%prnewswire.com. That means if you bundle your homeowners and car insurance with Farmers, you could see substantial savings – a nice incentive at a time when every dollar counts. Importantly, Farmers is focusing on the areas that need help the most. They expect to add “several thousand” new home insurance policies in distressed (high wildfire risk) areasprnewswire.com, and will even market directly to about 300,000 homeowners in those communities starting in early 2026prnewswire.com. In other words, they’re not just lifting the cap in theory – they’re actively inviting homeowners in places other insurers have shunned to come get coverage. As Farmers’ personal lines president Behram Dinshaw put it, this expansion is about giving consumers more choice and availability across the stateprnewswire.com.

What This Means for La Mesa and East County Homeowners

So, how does this help homeowners in La Mesa and nearby areas like Del Cerro, San Carlos, Mt. Helix, Tierrasanta, Rancho San Diego, Spring Valley, and El Cajon? Simply put, it expands your options for wildfire insurance right here in San Diego County. Many of these communities border canyons, open space, or wildland areas and know the yearly anxiety of fire season. In recent years, I’ve heard from neighbors who received non-renewal notices or struggled to find an insurer for a new home purchase in our area. With Farmers now back in the game at full capacity, there’s new hope that if your current insurer pulls out, you can secure a policy with Farmers rather than being forced onto the FAIR Plan or a pricey surplus policy. More competition among insurers could also mean more competitive rates in the long run, as companies vie for business instead of slamming the door shut.

A stable insurance market is not just about peace of mind – it also affects our local real estate market. Buyers of new and existing homes (like the San Diego homes pictured above) must have fire insurance to close on a mortgage, so having more insurance options keeps home sales movingbeinsure.com. Without coverage, even a dream home sale can fall apart at the last minute. In fact, the California Association of Realtors reported that about 13% of agents saw a home sale collapse in 2024 because the buyer couldn’t find insurance coveragebeinsure.com. That’s a startling statistic that hits close to home. Fortunately, moves like Farmers’ cap removal should help alleviate this problem – if buyers in high-risk areas can obtain insurance more easily, fewer sales in La Mesa and surrounding areas will fall through due to insurance issues. This is good news whether you’re a homeowner looking to sell or a buyer trying to move into our community.

How I Can Help – Insurance Guidance and Next Steps

As a local real estate professional in San Diego, I know how confusing and stressful the homeowners insurance situation has been. The landscape is changing, but here are a few tips and offers of help:

• Review your coverage: If you live in La Mesa or nearby, review your current home insurance policy and make sure you understand it. With Farmers expanding coverage, it may be worth shopping around again or inquiring if you’ve been non-renewed recently. I can connect you with trusted insurance brokers who work with multiple carriers and can find you an alternative policy if you’re struggling to get covered (or point you to the right resources).
• Stay proactive with fire safety: Even with insurers coming back, wildfire risk is still very real. Simple steps like clearing brush, installing ember-resistant vents, and hardening your home can not only protect your property but also make you more attractive to insurers. Some companies offer discounts for fire-resistant upgrades. I’m happy to share local expert contacts for home hardening or fire clearance if you need guidance – mitigating risk is win-win for safety and insurability.
• Thinking of selling? If you’re feeling tired of living in a high-fire zone and have been considering a move, you’re not alone. I’ve spoken with homeowners from Mt. Helix to Tierrasanta who are weighing their options after the stressful wildfire seasons we’ve had. The silver lining is that buyer demand in San Diego County is still strong, and the improved insurance climate will help keep it that way. I can provide a free home evaluation and discuss strategies to market your home’s fire safety features to reassure buyers. And if you’re looking for a new home in a lower-risk area, I can help you find that too – while making sure you understand the insurance situation wherever you land.

Bottom line: The fact that Farmers Insurance is lifting its cap and growing its coverage in California is great news for us in the La Mesa/San Diego area. It’s one big step toward easing the insurance woes that have weighed on homeowners in high-risk fire zones. You shouldn’t have to lie awake at night worrying, “Will my insurer drop me next?” – and this development brings us closer to that peace of mind. 🙏

If you have questions about how this insurance change affects you, or need advice on protecting your home (or even selling it), feel free to reach out to me. I’m here to help my neighbors navigate these challenges. Together, we can make sure you stay protected – or help you transition to the next chapter, safely and confidently. Contact me today, and let’s talk about your options! 🏠🔥

Chris Melingonis - The Realtor Dad  CONTACT ME

619-929-9812  /  chris@TheRealtorDad.com

Sources & References: Farmers Insurance Newsroomprnewswire.comprnewswire.com; Realtor.com News & Insightsblog.brickellsold.com; Fox Businessfoxbusiness.comfoxbusiness.com; Insurify/NBCRightNownbcrightnow.comnbcrightnow.com; Deep Sky Climate Reportprnewswire.com; Bankratebankrate.com; Beinsure/CA REALTORS®beinsure.com.

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