A few years ago, homeowners insurance was a box you checked a week before closing. In the hills of San Mateo County, it has become one of the first things I bring up with buyers, sometimes before we even tour a house.

The question used to be "how much will insurance cost?" Now, for some homes, it is "can we get it at all, and what will it look like?" The answer shapes what you can afford, how you write your offer, and in a few cases whether the deal closes. Here is what is going on and how to handle it, whether you are buying or selling.

What changed

After several years of record wildfire losses, many of California's largest insurers stopped writing new homeowners policies or cut back sharply, and some stopped renewing existing ones. That pushed a lot of homeowners onto the California FAIR Plan, the state's insurer of last resort.

The numbers tell the story. Statewide, average homeowners premiums rose about 84% between the end of 2020 and early 2026, and average deductibles went up too. Researchers at Stanford found that more than one in 17 new California home loans is now written with the FAIR Plan as the only coverage available. And the FAIR Plan itself is getting more expensive, with an average rate increase of about 29% taking effect in October 2026.

There is some good news. Under the state's newer insurance rules, several large carriers have agreed to start writing more policies in wildfire-prone areas, and some have begun reopening to new customers. It is slow, and it varies a lot by company and ZIP code, but options are starting to come back.

Where this shows up on the Peninsula

San Mateo County is a good example of how local this problem is. Two homes ten minutes apart can have completely different insurance stories.

  • The hills and canyons are where buyers run into trouble most often: the Belmont and San Carlos hills, Emerald Hills and the Redwood City foothills, parts of Hillsborough and the San Mateo highlands, Woodside, Portola Valley, and the Skyline corridor.
  • The coastside, including Half Moon Bay and the unincorporated areas around it, can also be tricky, especially closer to the wildland.
  • The flats, like most of Foster City, downtown San Mateo, Burlingame, and the bayside neighborhoods, are usually much easier to insure, though premiums have gone up everywhere.

The state updated its fire hazard severity zone maps for cities in 2025, and the designated zones expanded in many San Mateo County communities. You can look up any address on the State Fire Marshal's map.

One important caveat: those maps measure physical hazard, like slope, vegetation, and wind. Insurance companies use their own risk models. A house inside a mapped zone can sometimes get standard coverage, and a house outside one can still have trouble. The map is a starting point, not the answer. The only real answer is a quote on that specific address.

How the FAIR Plan works

If a home cannot get a standard policy, the fallback is usually a two-part setup:

  • The FAIR Plan covers the big one, fire, plus a short list of related causes like lightning and smoke. It does not cover liability, theft, or water damage from something like a burst pipe.
  • A difference in conditions (DIC) policy from a separate company fills in those gaps, so together the two policies work roughly like a normal homeowners policy.

It works, and plenty of Peninsula homeowners have it. It is usually more expensive than a standard policy, it means two bills and two companies, and it takes a little more time to put together. That time is what catches buyers off guard.

Earthquake coverage is separate no matter which route you take, and worth pricing out while you are at it.

If you are buying

Get a quote before you write the offer

For any home in or near the hills, I ask buyers to call an insurance broker as soon as a house is a serious contender. Give them the address, the year built, and the roof age from the listing. A preliminary quote takes a day or two, and it can save you from falling in love with a house you cannot insure affordably.

Use an independent broker

A broker who works with many companies, including FAIR Plan and DIC carriers, will find options much faster than calling carriers one at a time. If your current insurer says no, that does not mean everyone will.

Build it into your budget

An insurance bill that is a few thousand dollars higher each year matters, especially when you are stretching. Include the real quote when you run your monthly numbers, not an estimate from a website.

Protect yourself in the contract

Your lender will need proof of insurance before the loan funds. Make sure you have a firm quote in hand before you remove your contingencies, and ask the seller for their current carrier, premium, and any claims history. Past claims on a property can affect what you are offered.

What this looks like in practice: On a hillside home, I would rather have a buyer spend twenty minutes on the phone with a broker the day before we write an offer than find out in week two of escrow that the only option is a FAIR Plan and DIC combination that costs far more than they planned for.

If you are selling

If your home is in the hills, buyers and their agents are going to ask about insurance. The sellers who have answers ready tend to have smoother escrows.

  • Know your current policy. Your carrier, your premium, and whether you have had any claims. Sharing this early gives buyers a real starting point.
  • Document the roof. Age and material matter a lot to insurers. Have the permit or invoice ready.
  • Clear defensible space. Trim vegetation back from the house, clean gutters, and move firewood and other fuel away from walls and decks. It helps with insurance and it shows well.
  • Show your hardening work. Ember-resistant vents, a Class A roof, enclosed eaves, and similar upgrades all count. Keep receipts and photos. California requires insurers to offer discounts for certain wildfire mitigation, which is also worth knowing if you are staying put.

For homes where insurance is going to be a real question, I like to have that information in the disclosure package so buyers can get quotes before they write offers, rather than finding surprises after.

A quick, honest note: I am a Realtor, not an insurance agent. Coverage, pricing, and which companies are writing policies change often and depend on the specific home, so always get quotes from a licensed insurance broker. What I can do is help you spot where insurance is likely to be a factor, and plan the timing of your offer or listing around it.