For immediate release:                                                                             
July 28, 2025

CCRE shares new expert report citing six urgent actions to address insurance crisis

SACRAMENTO (July 28) – The Center for California Real Estate (CCRE) has released a new exclusive report, Proposed Solutions for California’s Homeowners Insurance Challenges, capturing key insights from a recent forum of cross-industry leaders seeking to address California’s insurance crisis. The findings are designed to inform policy discussions and industry response in the months and years ahead.

The forum was facilitated by Pete Peterson, Dean of the Pepperdine University School of Public Policy, and featured 20 leaders from academia, consumer advocacy, fire mitigation education, and the building and insurance industries, representing both California and national perspectives. It follows multiple recent cross-industry panels raising critical concerns surrounding the state’s escalating homeowners insurance crisis.

“It’s time to move from fragmented efforts to coordinated and public-private sector solutions that can stabilize the market, protect homeowners, and build long-term sustainability across the state,” said Peterson. “This report is more than a set of insights – it’s a roadmap for resilience, grounded in real-world expertise and actionable strategies. This report should be on the desk of every policymaker in California.”

The discussion noted as key catalysts of the insurance crisis the unsustainable growth of the FAIR Plan, strained to the limits of its capacity and financial structure; the state’s prolonged rate filing and approval process hindering insurers from pricing and managing risk; charged politics around needed rate increases chilling legislative progress; and the persistent cultural disconnect between collective concern and individual action threatening the success of traditional and contemporary mitigation efforts alike. 

Recommended solutions center around key themes involving modernizing the regulatory framework, scaling defensible space and home hardening programs, advancing data transparency and consistency, and advancing public engagement and education through trusted community actors like REALTORS®. Lessons from other states contributed to the exploration of possible solutions, with Colorado’s community-level assessments, North Carolina’s resilience bond and Alabama’s fortified roofs cited among programs with the greatest potential, and California initiatives and practices were examined for wider application.

The report cites six key proposed solutions designed to address the most pressing matters within the insurance crisis with the greatest expediency:

1. Address rate approvals and price suppression to expand market participation
   
   California’s required rate increase approvals take nearly 11 months on average, compared to the national average of just 64 days. Fast-tracking this process will create greater predictability for private insurers, creating incentives to stay in market or return to California. Participants suggested automatic, incremental rate approvals such as those used for water rate and property tax increases to streamline processing.
   
   
2. Secure long-term, scalable mitigation funding

   Participants noted that without comprehensive mitigation efforts at the property level, any meaningful insurance reform will ultimately fall short. Statewide investment in mitigation measures is essential to delivering long-term resilience, and it comes with a hefty price tag: an estimated $20 billion to $25 billion in costs over the next five years, and $2 billion annually thereafter. Panelists suggested a co-funding model including utility and insurance companies supporting the high impact mitigation zones.
   

3. Link financial incentives to risk-reduction measures

   Insurance discounts tied to risk reduction with a clear and consistent set of standards will financially motivate homeowners to act at the property level, the first line of defense in mitigation efforts. Programs like Alabama’s Fortified homes, which sell for 7 percent more than comparable properties, are an example for study and adaptation; another is a 2021 joint study by Zesty.ai and the Insurance Institute for Business and Safety (IIBS) showing enhanced mitigation measures in Zone 0 can improve a home’s chances of survival by 50 percent.
   

4. Create shared standards for fire risk modeling

   Panelists noted the need for common risk modeling standards that include both real-world and scenario-based projections and are usable by regulators, policymakers, consumers and insurers alike. Initiatives like FireBench are creating a common set of test cases, valuation metrics as a true benchmark against which risk and mitigation efforts can be measured and actionable. At the same time, flexibility in application and personalization is key; Mercury Insurance uses parcel-level modeling combined with onsite inspections to differentiate risk levels between similar properties in Paradise, Calif.
   
   

5. Prioritize mitigation efforts through public education and community action

   Bridging the noted public knowledge gap around defensible space and home hardening through education, inspections, and targeted incentives will be essential to advancing individual resilience and, ultimately, stabilizing the broader insurance market. California’s first-in-the-nation Wildfire Prepared Neighborhood pilot program combines home hardening, defensible space enforcement, vegetation management, and community organizing, and local Fire Safe Councils are emerging as trusted stewards to drive grant-funded activities like community outreach and neighborhood mitigation projects in partnership with local fire departments. However, these measures need both long term funding and individual and community-wide public support.
   

6. Leverage REALTOR®-client relationships for trusted messengers and mitigation connectors

Due to their personal connections, regular social interactions and relationships, and advisory role within communities, participants cited REALTORS® as ideally positioned and incentivized to share both education and resources around mitigation and collective responsibility. More than half of REALTORS® across the state cited access to insurance as their number one industry specific concern in 2024. In California, participants noted REALTOR® programs in progress that provide access to wildfire risk reports, help buyers comply with Zone 0 regulations, and co-host fire safety events for communities.

The report will be distributed to local Associations across the state for use in community education and advocacy efforts and shared with housing advocates and policymakers at various levels of government.   

About CCRE

The Center for California Real Estate (CCRE), an institute of the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), advances knowledge and research by collaborating with varied partners, spurs innovative thinking about key issues facing California and the real estate industry, and extends C.A.R.’s influence via intellectual engagement with different audiences, diverse stakeholders, and new external partners. Now into its second decade, CCRE serves as a nexus for multi-disciplinary thinking aimed at solving some of the state’s most challenging issues. Bringing together key experts from a variety of fields, from academics to policymakers to industry leaders, CCRE produces new knowledge and serves as a key resource about housing issues for all C.A.R. members, external entities, the media, and the public. Visit ccre.us to explore the Center’s online resources and learn about upcoming events.