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Health insurance isn’t the only insurance cost worrying seniors

In California, homeowners’ insurance is becoming unaffordable

Updated:

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By:
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Mark Huffman
Reporter

Mark Huffman has covered consumer issues since 2004, with a special focus on protecting and empowering older adults. A former news correspondent for the Associated Press Radio Network, Westwood One, and ConsumerAffairs, Mark brings decades of journalistic experience to RetirementLiving.com. He is passionate about giving consumers a voice and helping them make informed decisions. Mark has also created educational content, including Senior Scam Alert, a video resource designed to help seniors recognize and avoid fraud. He holds a B.A. from the University of Kentucky and lives with his family in Richmond, Virginia.

Photo by Scott Graham on Unsplash

Key Insights

  • Many retired Californians are being priced out of homeowners’ insurance, forcing difficult financial decisions.
  • Insurers are pulling out of high-risk markets due to wildfires, leaving seniors with few affordable options.
  • Advocates warn that rising premiums may threaten housing stability and retirement security for the elderly.

Seniors preparing for retirement are often advised to prepare for rising health insurance costs as they age. But maybe they should also be told to look out for sharp increases in homeowners’ insurance.

As wildfires and climate risk reshape the insurance landscape, retired Californians are facing an increasingly dire reality: the soaring cost of homeowners’ insurance is threatening their ability to remain in their homes.

Like many problems that eventually affect the nation, this one appears to have started in California. ABC 10 in Sacramento recently reported that many residents of the state, including a large number of seniors, are finding renters’ and homeowners’ insurance unaffordable, even if it is still available.

Many seniors in California live on fixed incomes from Social Security or modest retirement savings, making them especially vulnerable to rising costs. Homeowners’ insurance premiums have increased by as much as 300% in some high-risk areas over the past five years, driven by insurers’ escalating exposure to wildfire risk and regulatory constraints that limit premium adjustments.

From $1,100 to $8,000 a year

The TV station reports that one of its viewers, Sandy Vignolo, told reporters that she and her husband were paying $1,100 a year to insure their home, but their insurer dropped them, forcing them to go on the California FAIR Plan, increasing their premium to $8,000 a year. 

“We’ve had to dip into savings to pay that,” Vignolo said. “There are a lot of people around here…that it has gone beyond what they have.”

Major insurers such as State Farm and Allstate have scaled back or ceased issuing new policies in fire-prone zones altogether. As a result, many seniors are being dropped or left with no option but the California FAIR Plan, a last-resort insurance pool that offers limited coverage at significantly higher costs.

According to the California Department of Insurance, enrollment in the FAIR Plan surged by 46% between 2022 and 2024, with a growing number of policyholders over age 65.

Risky response

Some retirees are responding by underinsuring their homes or dropping coverage entirely—a financially risky move that leaves them exposed to catastrophic loss. Financial planners and housing advocates warn that this trend could have long-term implications. Retirees are effectively gambling their retirement security, housing advocates warn. If they suffer a major loss, there’s no financial cushion to rebuild.

For many seniors, homeownership is not just a financial investment but a symbol of independence. As insurance costs climb, more are facing the unthinkable: selling their homes or moving in with family to stay afloat.