The FAIR Plan, a last-resort insurance pool funded bymajor private insurers, provides coverage for homeowners unable to securepolicies due to wildfire risks. The program, originally designed as a temporarymeasure, now serves over 452,000 policyholders—more than double the 2020figure—as private insurers scale back coverage in the state.
Under a plan approved Tuesday,insurers operating in California will cover half the costs, while policyholdersface a one-time surcharge to fund the remainder. The exact amount of the feehas not been disclosed, but insurers must remit payments within 30 days.
The plan also anticipates$1.45 billion in reinsurance to help with payouts but expects to hold only $400million in reserves by July.
Industry leaders warned thatfurther strain could accelerate insurer departures from California. “This is essential to prevent even greater instabilityin the insurance market and avoid widespread policy cancellations,” MarkSektnan of the American Property Casualty Insurance Association noted in astatement.
“The responsibility now is onlocal governments to build better,” California Insurance Commissioner stated.
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