What Homeowners in San Diego County and Fire Zones Need to Know

Home insurance has become one of the biggest wildcard expenses for California homeowners, especially those living in fire-prone and rural areas like Jamul and East County San Diego.

Recently, two of California’s largest home insurance providers announced approved rate increases, along with changes to where they will offer coverage. While the headlines sound alarming, the reality is more nuanced and understanding what is happening now can help homeowners plan ahead.

Which Insurance Companies Are Raising Rates?

According to filings approved by the California Department of Insurance, both Mercury Insurance and CSAA Insurance Group (AAA’s insurance arm) are increasing homeowners insurance rates across large portions of the state.

• AAA (CSAA) has approved average rate increases of approximately 7 percent

• Mercury Insurance has approved average increases of approximately 8 percent

These adjustments impact hundreds of thousands of homeowners statewide, with rates largely determined by location, risk profile, and fire exposure, rather than a flat statewide increase.

Why Rates Are Going Up

Insurance companies cite several overlapping factors behind the increases:

1. Increased Fire Risk

Wildfire frequency and severity continue to reshape California’s insurance landscape. Areas with higher fire exposure, including parts of East County San Diego, face greater underwriting risk.

2. Inflation and Rising Rebuild Costs

Construction costs, labor, and materials have all risen significantly. Insurers must account for the increased cost to rebuild a home after a loss.

3. Catastrophe Exposure

From wildfires to flooding and extreme weather events, insurers are pricing policies to reflect the growing risk of large-scale claims.

These pressures are not unique to California, but they are more pronounced here, particularly in communities near open land, canyons, and wildland-urban interfaces.

Why Coverage Is Expanding in Fire Zones

In exchange for approving higher rates, California regulators are requiring insurers to expand policy availability in areas where coverage has been difficult or impossible to obtain, including designated fire zones.

This is a major shift.

For years, many homeowners in fire-risk areas were dropped or non-renewed with limited alternatives. Under the new framework, insurers must write more policies in these locations instead of exiting the market entirely.

This change is intended to stabilize the insurance market rather than shrink it further.

Some Homeowners Will See Lower Rates

Not every homeowner will see an increase.

According to the approved filings:

• Condo owners and renters are expected to see lower rates

• Homes with mitigation features may qualify for discounts

Insurers are increasingly rewarding homeowners who invest in risk-reduction measures.

How Homeowners Can Offset Insurance Increases

Many insurance companies now offer credits or discounts for proactive fire-safety and property-protection steps, including:

• Maintaining defensible space around the home

• Using fire-resistant building materials, especially decks and roofs

• Installing water-leak detection devices

• Improving overall property maintenance and access

For homeowners in Jamul and rural San Diego County, these improvements can make a meaningful difference, both in insurability and long-term costs.

The FAIR Plan Continues to Grow

For homeowners who cannot obtain traditional coverage, California’s California FAIR Plan remains the insurer of last resort.

Enrollment in the FAIR Plan surged by more than 21,000 policies in the final months of last year, highlighting just how many homeowners are struggling to secure standard insurance.

While the FAIR Plan provides basic coverage, it is often more expensive and limited, making it a temporary solution rather than an ideal long-term strategy.

Why This Matters for Homeowners Thinking About Selling

Insurance availability and cost are now a real estate issue, not just a homeowner expense.

In markets like Jamul, Rancho San Diego, and East County San Diego, insurance can impact:

• Buyer affordability

• Buyer confidence

• Appraisals and loan approvals

• Days on market

Homes with clear insurability, mitigation features, and documented safety improvements are increasingly more attractive to buyers.

The Bottom Line

California’s insurance market is evolving, not collapsing.

Rates are rising, but coverage is expanding in areas that were previously underserved. For homeowners in fire-prone regions, understanding your insurance options is now just as important as understanding your home’s value.

Whether you are planning to stay put, make improvements, or consider selling in the future, knowledge and preparation are key.

If you want to understand how insurance trends could affect your home value, marketability, or timing, a local, data-driven conversation can help you stay ahead of changes rather than react to them.