The report tracks premium growth and policy counts within state-run FAIR Plans to gauge regional stability. California’s market remains the most volatile, driven by catastrophic wildfire losses. The California FAIR Plan saw its policy count surge in 2025 as direct premiums approached $2 billion, triggering a $1 billion assessment on admitted insurers and an impending 30% rate hike. The state is now attempting to stabilize the private sector through expanded pricing flexibility and new liquidity tools.
In section Releases
Residual Property Insurance Markets Diverge in High-Risk States
While the U.S. homeowners insurance market posted a decade-high $17 billion underwriting profit in 2025, a new ALIRT Insurance Research report reveals a deepening divide across four high-risk states. California faces an acute crisis, while Florida’s residual market has hit record lows following aggressive legislative reform.
Conversely, Florida offers a starkly different trajectory. Following a series of legislative and litigation reforms initiated in 2022, participation in Citizens Property Insurance Corporation has dropped to record lows. The state has successfully attracted new private insurers and regained reinsurance capacity, allowing for the first rate decrease since 2015. Meanwhile, Louisiana is in a recovery phase following significant storm losses in 2020 and 2021, though the state’s residual market remains burdened. Texas maintains a comparatively healthy statewide profile, though rising exposure in densely populated coastal areas suggests growing pressure on the Texas FAIR Plan and the Texas Windstorm Insurance Association. ALIRT analysts warn that these residual market trends serve as a critical early warning system for private carriers, particularly smaller firms with limited capacity to absorb localized catastrophe losses.
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