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California’s record-setting wildfire losses and multi-year droughts have shaken the state’s homeowner-insurance market. Insurers have exited or paused new business, premiums have spiked, and regulators are racing to keep carriers’ solvent. Governor Gavin Newsom’s climate-risk executive order and Insurance Commissioner Ricardo Lara’s Sustainable Insurance Strategy aim to stabilize the market, but pool owners sit at a unique crossroads of water, fire and liability.
Historic wildfire losses. The January 2025 fires around Los Angeles produced insured losses estimated between $10 billion and $20 billion.
Carrier exits & emergency rate hikes. State Farm, Allstate and several peers limited or halted new homeowner policies starting in 2023. In May 2025 the Department of Insurance approved a 17 percent emergency premium increase for State Farm customers statewide.
Regulatory overhaul. Newsom’s September 2023 Executive Order N-13-23 instructed the commissioner to let insurers model forward-looking climate risk when setting rates. Lara’s Sustainable Insurance Strategy, finalized December 2024, implements that directive and obligates carriers that use the new models to keep writing in high-risk ZIP codes.
Policy cancellations & sticker shock. Pools add perceived liability and—during drought—signal “excessive” water use. An elderly couple in Northern California even lost their homeowners policy after draining their pool to conserve water.
Drought-versus-fire paradox. Firefighters in Los Angeles County recently drafted thousands of gallons from backyard pools when hydrants ran dry—yet most underwriting manuals give no credit for this benefit.
Surplus-line shuffle. As admitted carriers retreat, homeowners increasingly land in the excess-and-surplus market, where 2024 personal-lines premiums and policy counts rose sharply.
| High-Risk Segment | Why Coverage Is Harder to Get |
|---|---|
| Wildland-Urban Interface (WUI) homes | Extreme wildfire scores deter traditional carriers. |
| Homes over $1 million replacement cost | Large dwellings are often pushed to FAIR Plan + wraparound coverage. |
| New pool installations | Underwriters now demand construction water-usage plans and anti-entrapment certificates. |
The California Pool Association has emerged as a leading voice for pool owners navigating the current insurance landscape. By offering guidance on insurance challenges, advocating for fairer policies, and promoting best practices, the association plays a critical role in supporting its members during this crisis.
California’s new climate-risk rules may keep insurers in the state, but tighter underwriting and higher rates are today’s reality—especially for properties with pools. By documenting mitigation, embracing sustainability, shopping early and leaning on advocacy groups like the CPSA, pool owners can protect both their backyard oasis and their balance sheet.