My first question is “why is that the case?”

Like, is FAIR being (rationally) chosen because people simply cannot afford the private plans on offer, and private plans don’t provide a minimal-enough level of coverage? If so, maybe the problem is actually that we need more availability of housing, that people are financially-stretched too far.

Or are people irrationally getting too little fire insurance, and FAIR just provides an opportunity to do that? Then you’d think that we should improve the information available about fire insurance plans.

Or is FAIR providing a better cost-for-value, in which case one would want to look a breakdown of why private plans would cost more — like, is the market not competitive?

My own gut guess is that the most-likely largest culprit is the first, because I am comfortable saying that California has a very real undersupply of housing, which makes housing highly-unaffordable in California, and causes people to be under greater financial pressure. Like, we’d like to have more housing, which would reduce housing prices, which would permit people to spend less on housing, which would permit people to be less-financially-stretched, which would let people, among other things, spend more on insurance for that housing. I don’t know that that’s the dominant factor, but I’m pretty sure that it is a factor.

searches for an affordability metric

https://www.affordabilityindex.org/rankings/states/

On this metric, California ranks #43 out of 50 states plus DC on housing affordability, measuring what housing costs relative to income. That’s not the bottom of the bin, so it’s likely that one can’t chalk it up only to that, but it isn’t great, and I’d bet that it is a substantial factor.

takes another look at the metric

I’d also guess that it’s pretty good odds that the ratio being computed (income to price) is very probably using pre-tax income, and California is exceptionally high in absolute cost of housing among the states, second only to Hawaii. Because we use a progressive income tax system, having higher income means that each additional dollar in income goes less towards making housing affordable as income rises — instead, some of it goes towards effectively subsidizing standard of living in other states that have lower median income. So you’d expect the affordability issues in California to be more-severe than just that ratio suggests; California’s higher income would have less real-world effect than lower housing prices in other states relative to the ratio that the metric uses.

EDIT: This affordability metric ranks California at #47 on housing affordability out of 50 states plus DC.

https://www.realtor.com/research/state-report-cards-2025/

It’s also based on median (I assume pre-tax) income relative to house price.