The Dixon Trail community in California could signal a way forward for stakeholders grappling with the heightened risk of building, owning, and insuring homes in the fire-prone West.
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California's FAIR Plan applied for a rate increase last week—one that could increase costs significantly for thousands of residents across the state.
And it’s the first time that the FAIR plan—the “market of last resort” for those dropped by private carriers—has priced risk using wildfire catastrophe models that simulate thousands of fire seasons. These models estimate where and how danger could increase as the climate becomes hotter and drier.
The potential impact? Roughly half of FAIR Plan customers could face premium hikes of 40–55%, while homeowners in the stripe of irrigated agriculture down the Central Valley might see reductions up to 78%.
These dramatic pricing swings are a signal that insurers are beginning to bake growing climate volatility into the cost of homeownership. As wildfire risk intensifies, this approach is likely to spread.
Homeowners are now asking an urgent question: if insurers are planning for a fiery future, how do we stay insurable in it? The answer, increasingly, may lie not in fighting the new math, but in building for it. One Southern California development, designed to withstand the fires insurers are now modeling, is testing whether resilience can be a market advantage.
Escondido’s Dixon Trail neighborhood isn’t fireproof, but it’s as close as it gets. Roofs won't ignite. Vents won't allow embers in. A five-foot noncombustible buffer wraps each home. Even the neighborhood layout—vegetation placement, home spacing—is designed to starve a fire before it can spread.
Dixon Trail by KB Home is positioning itself as an appealing destination for people seeking both protection from wildfires and insulation from insurance hikes. This strategy reflects dynamics that didn’t exist even five years ago. For home buyers in Southern California, it's no longer just about location, location, location.
“Buyers want to feel safe in their homes and this is a really big plus for them,” said Steve Ruffner, the regional general manager for KB Home’s coastal division. He thinks the community’s rigorous safety standards will “help customers obtain insurance from an admitted state carrier, which will save them a lot of money over the state insurance program.”
It’s a glimpse of a different future: one where homes are built to be both survivable and insurable. And some insurance companies are starting to take notice.
Read more in our latest article on The Epicenter here.
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The Epicenter helps decision makers understand climate risks and discover viable resilience solutions. The Epicenter is an affiliated publication of The Resiliency Company, a 501(c)3 nonprofit dedicated to inspiring and empowering humanity to adapt to the accelerating challenges of the next 100+ years.
The Dixon Trail community in California could signal a way forward for stakeholders grappling with the heightened risk of building, owning, and insuring homes in the fire-prone West.
Francis Bouchard, Managing Director of Climate for Marsh McLennan, recently interviewed Roy Wright, CEO of the Insurance Institute for Business & Home Safety (IBHS), to discuss the future of insurance in the age of climate change and the importance of product innovation.
