Paradise, California residents just got something they haven’t seen in years: an insurer willing to write new policies. While State Farm, Allstate, and others flee California’s wildfire zones, Capital Insurance Group announced it’s expanding coverage options in the town still rebuilding from the 2018 Camp Fire that killed 85 people and destroyed 90% of structures.
The timing matters. California’s insurance crisis deepens daily—seven major carriers dropped or non-renewed hundreds of thousands of policies statewide in 2024 alone. Paradise homeowners faced particularly brutal choices: pay 300% premium increases, accept bare-bones FAIR Plan coverage, or go uninsured.
Capital Insurance Group’s move breaks that pattern. According to their November 19th announcement, they’re not just maintaining existing policies—they’re actively writing new ones and expanding what’s covered.
Here’s what Paradise’s 26,000 residents (pre-fire population was 27,000) need to know about this rare good news in California’s insurance wasteland.
Why Paradise Became an Insurance Desert After Camp Fire
The Camp Fire torched 153,336 acres in November 2018. Insurance companies paid out $12 billion in claims—the costliest single wildfire in world history at that time. What followed was predictable: mass exodus.
By 2023, Paradise homeowners reported these options:
- FAIR Plan only: California’s insurer of last resort, covering fire risk but nothing else. You need separate policies for theft, liability, water damage—which most carriers won’t write without underlying fire coverage.
- Premium increases of 200-400% for those lucky enough to keep traditional coverage.
- Coverage restrictions: Lower dwelling limits, higher deductibles, excluded structures like detached garages or sheds.
- Non-renewals: Policies canceled after wildfire mitigation work deemed “insufficient” by carrier risk models.
Reconstruction stalled. Banks won’t issue mortgages without adequate insurance. Developers won’t build. The town that promised to “rise from the ashes” couldn’t get insurance to rebuild.
What Capital Insurance Group Is Actually Offering
Capital Insurance Group operates as a regional carrier, not a national giant. That structural difference matters—they’re not answering to Wall Street quarterly earnings calls. Their parent company, iA Financial Group, provides backing without the profit pressures that drove State Farm and Allstate out of California.
The announcement mentions “expanding coverage options” without specifics, but industry context suggests this likely means:
- Writing new homeowners policies for rebuilt structures meeting current wildfire building codes (Chapter 7A).
- Increasing dwelling coverage limits beyond FAIR Plan’s $3 million cap (often insufficient for full rebuilds at 2025 construction costs).
- Adding extended replacement cost coverage—FAIR Plan doesn’t cover cost overruns if rebuilding exceeds policy limits.
- Potentially covering detached structures and landscaping, which FAIR Plan excludes entirely.
What they’re probably NOT offering: bargain rates. Expect premiums reflecting Paradise’s Wildfire Risk Score of 9.2/10 from First Street Foundation—meaning extreme wildfire risk over next 30 years.
Should Paradise Residents Switch to Capital Insurance?
Depends on your current situation. Run these numbers first:
| Your Current Coverage | Capital Insurance Advantage | When to Switch |
|---|---|---|
| FAIR Plan only | Comprehensive coverage (theft, liability, water damage) | Immediately if premium difference under 40% |
| FAIR Plan + wrap policy | Single-policy simplicity, potentially lower combined cost | Compare total premiums carefully |
| Traditional carrier | May be none (unless facing non-renewal) | Only if current insurer canceling |
| Uninsured (risky!) | Legal compliance, mortgage requirement, actual protection | Now—you’re one wildfire from financial ruin |
Action step: Contact local insurance agents serving Paradise (find agents via Independent Insurance Agents & Brokers of America) to compare Capital Insurance quotes against your current coverage. Get quotes in writing with identical coverage limits for apples-to-apples comparison.
The Bigger Picture: Will Other Insurers Follow?
Capital Insurance’s move could signal a shift—or remain an outlier. Three factors determine if this becomes a trend:
California’s insurance reforms matter. Insurance Commissioner Ricardo Lara approved changes in late 2024 allowing carriers to use catastrophe models (not just historical loss data) in rate-setting. This lets insurers charge premiums reflecting actual wildfire risk rather than artificially low rates that drove them out of the state. If Capital Insurance profits under the new rules, others may return.
Reinsurance costs. Insurers buy insurance from reinsurers to cover catastrophic losses. Global reinsurance rates for California wildfire risk jumped 40-60% from 2022-2024. Until those stabilize, most carriers won’t write new California policies regardless of rate-setting freedom.
Building code enforcement. Paradise rebuilt under stricter wildfire building codes—fire-resistant roofing, ember-resistant vents, defensible space requirements. Newer structures cost more but burn less. If loss ratios stay low, insurers gain confidence.
Paradise essentially became a test case for wildfire-resilient rebuilding. Capital Insurance is betting those investments pay off.
What Paradise Homeowners Must Do Next
Don’t wait for Capital Insurance agents to knock on your door. The company hasn’t announced policy limits, premium ranges, or application processes yet. Here’s your three-step plan:
Step 1: Document your wildfire mitigation work (this week). Take photos showing:
- Fire-resistant roofing materials (Class A rated)
- Ember-resistant vents and screens
- Defensible space zones (0-5 feet, 5-30 feet, 30-100 feet from structure)
- Non-combustible fencing or decking
Insurers offer 5-20% discounts for verified Firewise USA certification. Get your home certified at NFPA’s Firewise USA site.
Step 2: Contact three independent insurance agents (next week). Not captive agents (who sell one company)—independent agents represent multiple carriers including Capital Insurance. Ask specifically about:
- Maximum dwelling coverage available
- Extended replacement cost percentage (aim for 125-150%)
- Annual vs. semi-annual payment options (spread costs)
- Bundling discounts if you combine auto + home
Step 3: Review policy every 12 months (set calendar reminder). California’s insurance market changes quarterly now. Check California Department of Insurance updates for new carriers entering or exiting the market.
Bottom Line for Paradise Residents
Capital Insurance Group’s expansion gives Paradise homeowners their first real insurance competition in six years. That’s significant—but doesn’t solve California’s broader crisis.
The company’s regional focus means capacity limits. They likely can’t insure all 11,000+ rebuilt or rebuilding structures in Paradise. First movers get the best rates and coverage options.
If you’re rebuilding or already rebuilt, get quotes now. Document your wildfire mitigation work. Shop coverage carefully.
And if you’re still on FAIR Plan with no comprehensive coverage? This might be your exit opportunity. Just make sure the premium increase doesn’t exceed the coverage improvement.
Frequently Asked Questions
Is Capital Insurance Group a legitimate insurance company?
Yes. Capital Insurance Group operates as a licensed property/casualty insurer in California with A- (Excellent) financial strength rating from AM Best. Their parent company, iA Financial Group, is a Canadian financial services firm with over $200 billion in assets under management. They’re small compared to State Farm or Allstate but financially stable with backing from a major international financial group.
How much will Capital Insurance policies cost in Paradise?
Expect $3,000-$6,000 annually for a standard rebuilt home with wildfire mitigation features, based on current Paradise market rates. Homes without Firewise certification or older structures predating current building codes may see $7,000-$10,000+. FAIR Plan currently costs Paradise homeowners around $2,000-$3,000 but provides far less coverage—add another $1,500-$2,500 for a wrap policy to approach comprehensive protection.
Can I keep my FAIR Plan policy and add Capital Insurance?
No—you can’t double-dip on dwelling coverage. If Capital Insurance writes a comprehensive homeowners policy including fire coverage, you must cancel FAIR Plan. However, you could potentially keep FAIR Plan and add Capital Insurance as a wrap policy provider (covering what FAIR Plan excludes). This gets complicated fast—work with an independent insurance agent to structure coverage correctly and avoid gaps or unnecessary overlap.
Will Capital Insurance cover my detached garage and shed?
Likely yes, unlike FAIR Plan which excludes detached structures entirely. Standard homeowners policies typically cover detached structures at 10% of dwelling coverage—so a home insured for $500,000 gets $50,000 for detached garage, shed, and fencing combined. If you have expensive detached structures, ask about increasing this limit. Some carriers offer 20% coverage with endorsements.
What happens if another wildfire hits Paradise and Capital Insurance can’t pay claims?
California’s Insurance Guarantee Association (CIGA) protects you up to policy limits or $500,000 dwelling coverage (whichever is less) if your insurer goes insolvent. Capital Insurance also buys reinsurance—basically insurance for insurers—which covers claims exceeding their reserves. Their A- rating indicates strong capitalization, meaning low insolvency risk. Still, diversifying risk by bundling auto insurance elsewhere isn’t a bad idea.