Oct 15: The 29% Hit to Palisades Escrows

Jordyn$51,000 a year. That's the new Fair Plan quote that just landed on a listing on Amalfi Drive in Pacific Palisades.

DavidUp from 22.5?

Jordyn22.5. Pools full. Ocean views there. Price tag hasn't moved a dollar. Just the insurance line changed.

DavidAnd that's before the statewide reset even hits on October 15th.

JordynGood morning and welcome back to Listing Price. I'm Jordyn.

DavidAnd I'm David. That quote alone is basically the whole episode.

JordynPretty much. The state's got that Fair Plan hike averaging twenty nine percent. But this house is nowhere near average.

DavidAverages don't mean much when your insurance costs double overnight.

JordynAnd I want to know if any hardening discount actually touches a jump like that.

DavidBet it doesn't cover half of it.

JordynSo today we're tracing zip code by zip code which neighborhoods are actually eating that number.

DavidWe're also digging into how a moratorium built to protect fire victims Fire victims quietly ran out, and

JordynPlus, what it means that State Farm's resetting pricing while Farmers is out chasing new business.

DavidBuyers are already showing up to escrow demanding bindable quotes before they'll write an offer.

JordynWhich tells you where this market's headed into Q4.

DavidSo that Amalfi Drive number.

JordynLet's see what it means for every other listing on the bluff. Okay, get this: A place in the Palisades listed at $4.2 million; pool over the canyon; escrow closes October 20th.

DavidFive days after the reset.

JordynExactly. The Fair Plan quote on that file just jumped from $9,200 a year to $18,400. Byers Lender ran that number this morning.

DavidWish, so walk me through the actual date, because... Because everybody's throwing around this headline number.

JordynOctober 15th, the California Department of Insurance approved a 29.1% average Fair Plan dwelling rate increase effective on every new and renewal policy that day.

DavidRight in the middle of fall escrow season.

JordynDry timing.

DavidBut 29.1% of what, though? Because that's an average, and Averages hide the story.

JordynThey do! The state's pretty direct on this. The wildfire portion carries most of the weight. Heavily exposed properties can see that line item double.

DavidAnd the flip side?

JordynLower-risk policyholders could actually see a decrease.

DavidWait, some people's premiums are going down?

JordynSome. Not the Bird Streets crowd.

DavidRight, right. Here's where this really gets me. KRCR reported the FAIR Plan originally asked for something like 35.8%, not 29.1.

JordynThey got talked down.

DavidAnd by the Plan's own statements, without the Sustainable Insurance Framework, they'd have pushed closer to 80%.

Jordyn80%?

DavidThat's the ask before the state stepped in, which tells you exactly- Exactly how far behind the actual pricing had fallen?

JordynSo the number everyone's mad about is already the discount version.

DavidBasically.

JordynOh, great. Comforting.

DavidFollow the money: the plan absorbed four billion in losses from the January twenty-five fires; this is them clawing it back.

JordynAnd every Westside listing that closes after the fifteenth gets underwritten at the new number.

DavidBuyers are already running that math into their offers.

JordynSo if you're in escrow right now, the question isn't your list price.

DavidIt's your closing date.

JordynOctober fourteenth just became the most valuable day on the calendar.

DavidWhich raises the obvious question, 29.1% of what exactly? What's actually inside that premium line?

JordynCute. Building on that hike, walk me through what this thing actually pays for, because I don't think most sellers know.

DavidIt's technically a dwelling fire policy. No liability, no theft, no water damage beyond a short list of perils.

JordynWait, no liability, so if a contractor trips on the driveway?

DavidYou're covering that yourself. That's why almost every Westside file also carries a Difference in Conditions wrap stacked on top. Top, filling in everything the Fair Plan skips.

JordynA fire for fire, a second for your rest of life-efficient.

DavidAnd here's the number that wrecks buyer math: the Fair Plan's residential dwelling limit tops out around $3 million.

JordynThree million on a 9M dollar Palisades house?

DavidThat's the gap. You're stacking Fair Plan, then the Difference in Conditions wrap, then an excess layer just to cover the other $6 million.

JordynSo that blended stack is what actually shows up as monthly carry, not the headline rate?

DavidRight. Real Cost Report put the FAIR Plan average near three thousand a year against roughly fifteen hundred seventy one on the private market statewide.

JordynAlmost double.

DavidAnd once the difference in conditions wrap gets added on, they're pricing at closer to three times private market cost for a comparable house.

JordynSo the savings is you get to pay for two policies instead of one.

DavidThere's a real discount, though. The Plan's wildfire hardening program lets homeowners stack up to a dozen mitigation upgrades-class A roof, ember-resistant vents, cleared brush-for something like 16.4% off just the wildfire portion.

JordynOkay, real talk. 16% off one slice of the bill doesn't touch a 29% hike to the whole bill. That's cute, but it's not solving the actual problem.

DavidIt's not solving it; it's shaving a few hundred off an increase measured in thousands.

JordynSo for a nine million dollar listing, what's the real monthly number?

DavidLayer FAIR Plan, the difference in conditions wrap, and excess coverage on a property that size, and you're looking at insurance carry in the high four figures a month before the mortgage even enters it.

JordynThat's a second car payment every single month.

DavidAnd that's the pre-October number. After the 15th, it moves again.

JordynWhich means the real question isn't the statewide average anymore, it's which zip code you're standing in when that bill lands.

DavidThat's the map we draw next.

JordynOkay, so get this. Flip the exposure map on its head.

DavidZip codes.

JordynExactly. The moratorium list is literally the cheat sheet for who's exposed. 90272 Palisades, 90402 Santa Monica North End, 90265 Malibu, 90409 Brentwood, 90290 Topanga, and yeah, even 91302 and 91436 out in the valley.

DavidFreeman Mathis-Gary tracked that moratorium back to the emergency department. After the fires, those seven zips are exactly where insurers got the most nervous.

JordynRight, but here's what's actually moving in those same zips: flat, Don brush inventory—that's quietly winning.

DavidHow so?

JordynBel Air's Flats, Holmby Hills, interior Brentwood streets nowhere near a canyon—underwriters treat those completely differently from a Malibu bluff lot.

DavidIt's proximity to fuel, not the zip code, the actual parcel.

JordynWhich means your safe Brentwood address doesn't actually save you if your house happens to sit four doors up the slope.

DavidGive me the picture.

JordynPicture this: two houses, same street, same view; house one, classy roof, clear, defensible space, ember resistant fence; house two, wood deck cantilevered over the hillside, hedge basically touching the eaves.

Speaker 3And the premium gap?

DavidFive figures-same block, same school, same mailing address, and the insurance conversation is completely different.

JordynI don't buy the safe pocket idea though; everyone assumes Brentwood flats are bulletproof. Bulletproof because they're not Malibu. And sure, they're not as exposed, but that doesn't make them cheap anymore, not by a long shot.

DavidFair. Though I'd separate how much of that gap is insurance versus just normal price discovery, buyers were already paying up for defensible space lots before the FAIR Plan hike.

JordynSure, but that's the move right now. The hike is what's making buyers actually ask about it at inspection. Insurance is the new question before the kitchen tour.

DavidThat part's true.

JordynSpeaking of buyers asking questions, Palisades pricing itself is telling. It's holding, barely moving.

DavidRedfin's tracking the three month median around 2.83 million out there right now.

JordynWith days on market pushing 55, not a crash.

DavidNo, but 55 days is buyers using time as leverage instead of walking. They're negotiating the insurance quote into the price.

JordynSo sellers aren't losing buyers, they're losing dollars.

DavidExactly the trade, zip by zip, lot by lot.

JordynWhich raises the bigger question: What happens when protection on those seven exact ZIPs runs out?

DavidFunny you ask—that clock already expired. Building on that map, here's what shifted while everyone stared at October fifteenth: the SPA 2.4 moratorium is over.

JordynWait-the one from the emergency declaration?

DavidGovernor's emergency declaration on January seventh, twenty twenty five, triggered S.B. 241's one year moratorium, locked in under Bulletin 2025-1; and it ran out January seventh of this year.

JordynSo carriers can drop people in those seven zip codes again.

DavidWith standard notice, yeah. Nobody put out a press release, it just lapsed.

JordynOf course it did. Real talk? Every one of these consumer protections is temporary by design, and the expiration date is the part nobody remembers.

Speaker 4And the money already moved behind it; State Farm General got emergency interim relief in a March settlement: seventeen per cent on homeowners, thirty two point eight per cent on rentals.

Jordynthirty three on rentals?

Speaker 4Thirty two point eight specifically-and that number's the ceiling everyone else files against now.

JordynSo the next carrier just points at State Farm and says, 'Well, they got theirs.

Speaker 4That's the play: follow the settlement, then follow the filing calendar.

JordynBut appetite's not uniform; Allstate already took its hit, a thirty-four point one increase hitting hundreds of thousands of policies.

Speaker 4Meanwhile, Farmers lifted its new business cap late last year and is asking for something in the single digits.

JordynSingle digits, after all that?

Speaker 4Farmers want share back, while State Farm's still digging out.

Speaker 5No!

Speaker 4Different incentive, same market.

JordynSo there's coverage out there if a broker actually shops it.

Speaker 4There is. Weiss Ratings' read of NAIC filings puts the statewide non renewal rate near three point one eight percent in twenty twenty four.

JordynThat sounds small!

Speaker 4It's roughly four times the twenty eighteen level, and that counter restarted this year in the exact same zip codes we just mapped.

JordynSo the moratorium never fixed the trend; it just paused it for exactly one year.

Speaker 4Which flips the order of operations for every escrow file still open before Thanksgiving.

JordynOkay, so get this-with carriers reshuffling like that, buyers on the Westside aren't waiting anymore; they want a bindable quote in hand before they even write the offer.

Speaker 4Before contingencies come off, too. Nobody wants to learn their premium tripled after they've already gone non-refundable.

JordynThat's the priciest way to learn a lesson.

Speaker 4And if you're a seller with a renewal date before October fifteenth, that's leverage now, not just paperwork.

JordynA current, transferable insurance policy. As picture plus documented hardening; new roof; cleared brush,--that's the shift; that's real dollars in negotiation now.

Speaker 4I'd put it at five to ten grand off final price for a seller who hands buyers a clean binder day one.

JordynTen grand just for the certainty of paperwork?

Speaker 4For certainty buyers are paying to skip the anxiety.

JordynNow flip to raw lots. Redfin's numbers on Q3 2025 Palisades sales put investors near forty percent of lot buyers, and here's why that matters.

Speaker 4Because land doesn't need a FAIR Plan quote: no structure, no premium.

JordynWhich tells you exactly where this stalls: the highest brush exposure listings sit abandoned. While anything hardened and insurable holds price, insurance is the new zoning.

Speaker 4My Q4 number: days on market on brush adjacent listings clears ninety by Thanksgiving. They're running forty five fifty right now.

JordynI'll take the other side. I think it shows up as credit requests, not walkaways. Buyers negotiate the insurance gap into the final price instead of ghosting the deal.

Speaker 4So October fifteenth doesn't kill deals outright in your read.

DavidRead.

JordynNot the ones already locked in escrow-the real damage lands on new listings that never get an offer at all.

Speaker 4So we agree on the crisis, just not the autopsy.

JordynMark October fifteenth on your calendar, and this is the kicker: get the insurance quote before you get the offer. Okay, so if you take one thing from today, David's little line about October 14th being the most valuable day on the calendar, chefs kiss.

Speaker 4It's real, though. Sellers in escrow before the Fair Plan reset have actual leverage right now.

JordynReal talk, that's the whole Palisades story in one date.

Speaker 4And it's not just Palisades. Every wildfire-adjacent zip code is running that same clock.

JordynCute, but also kind of terrifying.

Speaker 4Fair. Anyway, that's the episode.

JordynNew one drops every Tuesday, so follow Listing Price wherever you're listening.

Speaker 4And if you've got a deal or listing we should be digging into,

JordynSend it our way. We want the weird ones.

Speaker 4Thanks for hanging with us today.

JordynSee you next Tuesday. Thank

Speaker 6you for watching.