What Exactly is the FAIR Plan Insurance?
For a little background, Californian homeowners who can't find insurance in the private market have the option of the FAIR Plan, which serves as a last-resort provider of fire coverage. This plan is funded by a fee imposed on regulated insurers. From 2018 to 2022, the number of homeowners relying on the FAIR Plan more than doubled, covering about 3% of all homeowners.
However, FAIR Plan policies are costly and come with limitations. If the FAIR Plan depletes its funds, it's legally obligated to replenish them by imposing an additional charge on major insurers. The possibility of the FAIR Plan running short of funds and transferring the cost to the industry has also prompted insurance companies to reduce their coverage.
San Luis Obispo County Farm Bureau’s Executive Director Brent Burchett…
“…the FAIR Plan, California's insurance of last resort. It's very cost prohibitive, but it is better than not having coverage at all.”