Can't Get Homeowners Insurance on the Home You're Buying? How the FAIR Plan Works in Escrow (SFV and Santa Clarita)

Short answer: If regular insurance companies decline the home you're buying, a licensed insurance broker can usually place a California FAIR Plan fire policy, which most lenders accept as the fire coverage on the loan. FAIR Plan only covers basics like fire, so most buyers add a separate Difference in Conditions (DIC) policy for theft, water damage and liability. Start shopping coverage the day your offer is accepted, and get a written quote before your contingencies are removed.

A few years ago, homeowners insurance was a line item buyers handled the week before closing. Not anymore. In parts of Tarzana, Woodland Hills, Saugus and Canyon Country, buyers now hear "we can't write that address" from one carrier after another. The good news: in most cases there is still a path to closing. Here's how it works, step by step, and what to do in what order so it doesn't blindside you in escrow.

Why this is showing up in Valley and SCV escrows

The California FAIR Plan is the state's insurer of last resort. It was created by statute and is run by an association of insurance companies, for people who can't get coverage from a regular carrier (California Department of Insurance). Its growth in our area has been steep. These are FAIR Plan residential policy counts by ZIP code, from the FAIR Plan's own fiscal-year report (California FAIR Plan, residential policies in force by ZIP, as of Sept. 30, 2026):

• 91356 Tarzana: 243 policies in Sept. 2022 → 1,207 in Sept. 2026
• 91364 Woodland Hills: 358 → 1,480
• 91350 Santa Clarita (Saugus): 195 → 1,443
• 91387 Canyon Country: 482 → 2,342

Statewide, FAIR Plan residential policies went from 265,909 to 665,673 over the same four years. Across all lines, the FAIR Plan wrote 195,929 new policies in its fiscal year ending September 2026 (California FAIR Plan Key Statistics & Data, updated Oct. 2026). In plain terms: a buyer in our area getting declined by a few carriers is no longer unusual, and it is not by itself a reason to walk away from a house.

Step 1: Start shopping insurance the day your offer is accepted

The biggest mistake I see is waiting. Your purchase contract gives you a set number of days to investigate the property and remove contingencies. Insurance belongs inside that window. Read your own contract for the exact deadlines, and ask your agent which contingency covers insurability.

• Call a licensed insurance broker, not just one captive agent. A broker can check several companies at once. The FAIR Plan itself says its customer service staff can't advise you on coverage, and that a broker can (California FAIR Plan: How to Apply).
• Give the broker the address, year built, roof type and age, square footage and any updates. Inspection reports help.
• Use the Department of Insurance's Top Ten Tips for Finding Residential Insurance as your checklist.

Step 2: If regular carriers decline, go through the FAIR Plan

The FAIR Plan is meant for homes that can't get coverage elsewhere. Your broker first does a diligent search of the regular market, and only if nothing is available do they help you apply to the FAIR Plan (California FAIR Plan). Not every broker is registered with the FAIR Plan, so ask up front. The Department of Insurance says residential FAIR Plan limits now go up to $3 million, and the plan allows monthly payments without a fee (CDI).

Step 3: Add a Difference in Conditions (DIC) policy

A FAIR Plan dwelling policy is basic fire coverage. It is not a full homeowners policy. The Department of Insurance says that for coverage like water damage, liability, theft and additional living expenses, you currently need a separate Difference in Conditions policy, and it keeps a list of companies that sell DIC policies. The Department also says a more complete FAIR Plan residential option is in progress, but until it exists, plan on two policies (CDI). Earthquake coverage is separate again.

Ask your broker for one combined number: FAIR Plan premium plus DIC premium, per year and per month. That's the figure that matters for your budget.

Step 4: Give your lender the real number early

Your lender needs proof of acceptable fire coverage before funding, and the premium goes into your monthly payment and your debt-to-income ratio. A FAIR Plan plus DIC combination can cost more than the estimate you were pre-approved on. Send the written quote to your loan officer as soon as you have it, and ask two things: will they accept this coverage, and does the higher payment still qualify? Better to learn that during your contingency period than the week of closing.

Step 5: Look for hardening discounts

For policies effective Nov. 15, 2025 or later, the FAIR Plan offers up to 12 wildfire-hardening discounts on the wildfire portion of a dwelling premium, worth up to 16.4% if a home qualifies for all of them (California FAIR Plan Wildfire Hardening Discounts). The list includes things buyers can actually check on a showing:

• A Class A fire-rated roof (composition shingle, tile, concrete or metal)
• Enclosed eaves and ember-resistant vents
• Multi-pane windows or shutters
• A clear 5-foot zone around the house, with no combustible mulch, debris or fencing
• Trimmed trees and defensible space that meets state and local rules

Photos and receipts for this work are worth gathering in escrow. They can also help when you shop the regular market again at renewal, since the FAIR Plan describes itself as a temporary safety net until regular coverage becomes available.

If you're selling: get ahead of it

Sellers can't buy the buyer's policy, but you can make the buyer's broker's job easier. Before listing, pull together your roof age and permits, any vent, eave or window upgrades, and photos of your cleared 5-foot zone and defensible space. If your own home is insured through the FAIR Plan today, that's useful for buyers and their agents to know early, so nobody is surprised in week two of escrow.

Your practical checklist

1. Line up a licensed insurance broker before you write an offer.
2. Send the address and inspection details the day your offer is accepted.
3. If carriers decline, ask the broker for a FAIR Plan quote plus a DIC quote in writing.
4. Send the combined premium to your lender and confirm they accept it.
5. Write down the hardening items the home already has, and what it would take to add the rest.
6. Keep all of this inside your contingency period, and don't remove contingencies until coverage is quoted.

If you're buying or selling in Tarzana, the Valley or Santa Clarita and insurance is making you nervous, text us at (818) 278-2175. Our team can walk through the timeline with you and point you to the right professionals.

This is general information, not insurance, legal or tax advice. Coverage, eligibility, prices and discounts vary by property and change over time; confirm with a licensed California insurance broker and your attorney. We're not a lender; talk with a licensed loan officer about how insurance costs affect your qualifying.

Frequently asked questions

Can I still buy a house if insurance companies won't cover it?

Usually, yes. If regular carriers decline, a licensed broker registered with the California FAIR Plan can apply for a FAIR Plan fire policy, which is the state's insurer of last resort. Confirm with your lender that they accept it, and do this before you remove contingencies.

Does the FAIR Plan cover everything a normal homeowners policy covers?

No. A FAIR Plan dwelling policy is basic fire coverage. The California Department of Insurance says coverage like water damage, liability, theft and additional living expenses currently needs a separate Difference in Conditions (DIC) policy. Earthquake coverage is separate too.

How do I apply for the California FAIR Plan?

Work through a licensed insurance broker who is registered with the FAIR Plan. The broker first searches the regular market, and if no coverage is available, helps you apply to the FAIR Plan. The Department of Insurance also lists the FAIR Plan's phone number, 800-339-4099.

How many homes in Tarzana and Santa Clarita are on the FAIR Plan?

Per the FAIR Plan's report as of Sept. 30, 2026, ZIP 91356 (Tarzana) had 1,207 residential FAIR Plan policies, up from 243 in 2022. ZIP 91350 (Santa Clarita) had 1,443, up from 195, and ZIP 91387 (Canyon Country) had 2,342, up from 482.

Can I lower a FAIR Plan premium?

Possibly. For policies effective Nov. 15, 2025 or later, the FAIR Plan offers up to 12 wildfire-hardening discounts on the wildfire portion of a dwelling premium, up to 16.4% in total, for items like a Class A roof, enclosed eaves, ember-resistant vents and a cleared 5-foot zone. Ask your broker which ones the home qualifies for.

Sources

• California FAIR Plan: Policy Growth by Fiscal Year (Residential Line), data by ZIP code (as of Sept. 30, 2026; published Oct. 2026)
• California FAIR Plan: Key Statistics & Data (through Sept. 2026; page updated Oct. 27, 2026)
• California Department of Insurance: California FAIR Plan (accessed Nov. 11, 2026)
• California Department of Insurance: List of Insurers that Sell Difference in Conditions (DIC) Policies (accessed Nov. 11, 2026)
• California Department of Insurance: Top Ten Tips for Finding Residential Insurance (accessed Nov. 11, 2026)
• California FAIR Plan: How to Apply (accessed Nov. 11, 2026)
• California FAIR Plan: Wildfire Hardening Discounts for Dwelling Fire & Commercial Policies (effective Nov. 15, 2025)

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By Randy Plaice, Broker Associate, DRE #01863252 · Randy Plaice & Associates | Real Broker · Real Broker DRE #02022092. Our team has helped sell 300+ homes across the San Fernando Valley and Santa Clarita since 2009. Questions? Text us (818) 278-2175. Equal Housing Opportunity.