Insurance Premiums and Climate Withdrawals — 2026-09-06

Top developments

Employers forecast 8.2% rise in health insurance costs

A new survey reveals that employers predict an average 8.2% increase in the cost of their health insurance plans for the upcoming year. Workers are expected to shoulder a significant portion of this cost through higher premiums and out-of-pocket expenses, marking a sharp acceleration compared to previous years.

California FAIR Plan approves 29.1% homeowners rate hike

The California Department of Insurance has approved a "necessary overall 29.1% rate increase" for the state's FAIR Plan, the insurer of last resort for homeowners who cannot find coverage in the private market. This significant hike reflects the growing financial strain on the plan as traditional insurers continue to withdraw from high-risk areas.

Surplus line insurance booms as traditional carriers retreat

As extreme weather events escalate, demand for surplus line insurance—often used as a last resort when standard policies are unavailable—is surging. Traditional insurers are increasingly pulling back from areas most vulnerable to wildfires and floods, forcing more Americans into these alternative, often more expensive, coverage options.

Rural Arizona homeowners dropped despite mitigation efforts

In Heber-Overgaard, Arizona, residents report being dropped by long-term insurance carriers despite investing thousands of dollars in Firewise property improvements to reduce wildfire risk. State committees are currently reviewing regulatory responses to address the crisis of uninsurable properties in rural, high-risk zones.

Local view

KRCR-TV (Redding, CA): Local insurance agents note that the FAIR Plan's 29.1% rate increase will likely be felt across the Northstate region, impacting many homeowners who have already seen premiums rise due to wildfire risk. Mike Littau, a Redding agent with Goosehead Insurance, highlighted the widespread impact on local households seeking coverage.

FOX 10 Phoenix (AZ): Local stakeholders in Heber-Overgaard describe a sense of helplessness as they face policy non-renewals. The outlet reports that residents feel punished by the market despite proactive mitigation efforts, prompting calls for stronger state intervention to ensure availability of coverage.

Context & numbers

• Health Insurance: The projected 8.2% employer-sponsored premium increase follows a period where ACA Marketplace out-of-pocket premiums rose from $113 to $178 per month in 2026.
• Homeowners: The California FAIR Plan's total exposure has grown to $768 billion, a 250% increase since September 2022, necessitating the recent rate hikes to maintain solvency.
• Auto Insurance: Average annual car insurance premiums in the US reached $2,256 in early 2026, up 3% from the previous year, with projections indicating increases in 32 states by year-end.

On the radar

• Florida Property Insurance Changes: Applications for specific property insurance tax credits or adjustments for purchases made between July 1, 2026, and June 30, 2029, are being accepted by the Florida Department of Revenue through September 30, 2029.
• Wildfire Liability Legislation: California lawmakers recently filed a bill that would update wildfire response protocols without shifting liability away from publicly traded utilities, a move that contradicts Governor Newsom's earlier proposals to shift liability to insurers. This legislative tug-of-war could impact future premium structures.