SACRAMENTO, California — Insurance Commissioner Ricardo Lara announced changes last week to the coverage limits and financial liability of the state’s property insurer of last resort that he said would eventually give property owners more options for insurance.
Lara’s agreement with the FAIR Plan, a pool of insurance companies that is required by state law to offer insurance to Californians who can’t find traditional coverage, increases its coverage limits from $20 million per location to $20 million per building and $100 million per location. The change means there could be multiple, $20 million structures per address or location — whether that’s homes or wineries or other buildings. It also defines how much traditional insurers would be responsible for covering the FAIR Plan’s claims in case of a catastrophic loss that would wipe out its cash reserves.
The changes will provide some relief to both insurers that have fled the state because of wildfire risk, as well as the owners of expensive properties in fire-prone areas.
“Modernizing the FAIR Plan is a crucial step in our strategy to stabilize California’s insurance market,” said Lara in a press release. “By strengthening the FAIR Plan while providing financial stability and solvency protections, we are creating long-term security for consumers, homeowners, and businesses across the state that is long overdue.”
