California’s plan that provides insurance to homeowners who can’t get private coverage needs $1 billion more to pay out claims related to the Los Angeles wildfires, the state Insurance Department said Tuesday.

The move will likely lead to higher costs for households across the state, and may push more insurers to leave, intensifying a home insurance crisis.

California's state-supervised fire insurance provider of last resort received approval to levy a $1 billion assessment on private insurers to ensure it can continue paying claims from the devastating January 2025 wildfires.