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California’s FAIR Plan Faces $1 Billion Shortfall Following LA Wildfires

Wildfire Fire Burns East Of Los Angeles covering the area in smoke

California’s FAIR Plan, the state’s insurer of last resort for homeowners unable to obtain private insurance, requires an additional $1 billion to cover claims from the recent Los Angeles wildfires.

California FAIR Plan Assessment: Insurers to Recover Costs Through Policyholder Fees

Wildfires are among forces of nature that cause huge devastation to humans and environment. wildfires have left little behind, turning communities to ashen, barren hills. Nearly every year, California experiences major wildfires that can be devastating to the environment and communities throughout the state.

The California property and casualty insurance market is facing significant financial adjustments as insurers prepare to recover up to half of a $1 billion assessment imposed by the California FAIR Plan.

FAIR Plan’s Share of California Residential Market Nearly Doubles Since 2017-18 Wildfires

Wildfires and insurance in CA

The California FAIR Plan’s share of the state’s overall residential policies in force rose to 3.1% in 2022, nearly double the 1.6% it held before wildfires in 2017 and 2018 caused tens of billions of insured losses, according to state Department of Insurance data.

CA Commissioner Lara and FAIR Plan Reach Agreement to Increase Commercial Property Insurance Limit to $20M

CDI and Fair Plan

This important adjustment more than doubles existing coverage limit options for California businesses.