For homebuyers looking to purchase a house in wildfire-prone communities such as California's Santa Clarita, insurance costs alone can push an otherwise affordable property out of reach. 

Here's what to know

California's average homeowners insurance premiums jumped 84% from late 2020 through March 2026, according to Stanford University. The increase has only added to the significant financial pressures prospective buyers already face. 

The Stanford white paper also found that average deductibles rose from $1,813 to $2,553 over the same period. This meant that, in addition to higher premiums, homeowners could also face larger out-of-pocket expenses when filing a claim.

California's insurer of last resort, the FAIR Plan, insures roughly 5% of the state's single-family homes and supports about 6% of newly issued mortgages, according to KHTS. The FAIR Plan's limited coverage covers fire, smoke, lightning, and in-home explosions. 

However, even the FAIR Plan has not been immune from rising prices. Effective in mid-October, the plan's rates jumped by an average of 29.1%, while some high-risk homeowners could see their wildfire premiums double, according to KQED. Almost half of those insured through the FAIR Plan buy additional coverage, adding to the cost. 

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More background

As KHTS noted, an additional $2,000 in annual insurance premiums works out to roughly $167 a month. For households on a budget, that money must come from somewhere. 

Adding to the challenge, lenders require evidence of homeowners insurance before releasing loan funds, according to KHTS. Learning late in the purchase process that an insurance policy costs more than expected can delay a sale or prevent it from going through entirely. 

In Santa Clarita, the famous Santa Ana winds combine with neighborhoods that border open lands to make fire protection a particularly important consideration when evaluating a property.

What can be done?

Prospective buyers can start educating themselves about a property's fire risk by using the Office of the State Fire Marshal's fire hazard viewer. The system's address-based maps account for terrain, vegetation, and fire weather when estimating fire risk. However, it does not account for whether an individual home has fire-resistant features.

Before making an offer on a home, buyers can get a better idea of the insurance costs by giving an insurance broker the property's address, construction year, and roof type to obtain actual quotes. Asking about discounts for ember-resistant vents, Class A-rated roofing, or cleared vegetation may also help identify savings, according to KHTS.

Additionally, when negotiating a closing date, buyers can leave enough time in the contract to secure a binding insurance quote.

For homeowners looking to lower household expenses, with Palmetto's help, the average Southern California resident can save 40% on their electric bills, which can add up to thousands of dollars per year. Additionally, the program's $0-down option removes the barrier posed by high upfront costs. 

Where can I learn more?

Santa Clarita homeowners aren't the only ones facing higher insurance costs and limited coverage options.

• California's FAIR Plan raised rates by 29%, leaving mountain residents worried about steeper bills.

• In California's Inland Empire, even new homes faced coverage gaps amid the insurance crisis.

• A California homebuyer faced a $25,000 fire deductible after turning to an unfamiliar insurer.

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