Your post has California as a tag, so I assume this is in CA. CA is having an insurance failure. One contributing factor is prop 103 restricts insurance from raising rates above a certain percentage without public hearing, and cost of replacement increased far above that percentage following the post-COVID housing bubble and cost increases. This led to CA home insurance being unprofitable or less profitable than elsewhere, so most of the big insurance companies either left the state or stopped issuing new policies. Around the same time, insurance companies also took a hit with wildfires, including the 2025 Palisades fire, which is estimated to be the most expensive wildfire in US history.
You mentioned this is a condo. The few remaining insurance companies issuing new policies in CA are often especially reluctant to touch large group policies like this, as the risk is too concentrated. Rather than covering 5% of homes in the neighborhood, they are covering the equivalent of 100% of homes in the neighborhood with a condo group policy. A fire hitting that particular neighborhood / condo complex would not bode well for the insurance company. I’ve heard of condos not being able to get any standard insurance at all for their complex , leading to expensive non-standard insurance and giant rate hikes, measured in 4-figures per month HOAs for their condo or huge special assessment fees.
However, for typical private homes in CA that are not located in high risk fire areas, fire is only a small contributing factor to the net insurance cost. One review found that external fires that do not originate within the home only compose 0.1% of home insurance claims, and all fires (both originating in and out of home) compose under 3% of home insurance claims. I am a home owner in CA. When I spoke with insurance agents about costs, I was told water damage was responsible for the largest portion of claims $… much larger than fire. Nevertheless, I’d certainly want my insurance to cover fire damage.