With many standard insurance carriers limiting the homes they will cover due to high fire risk; many people are obtaining insurance through the California Fair Plan. The California FAIR Plan is a syndicated fire insurance pool that provides insurance coverage to property owners unable to obtain coverage through the standard insurance market.
Here's how the California FAIR Plan works:
- Who is eligible: Homeowners unable to get coverage through traditional insurance companies due to a high risk of wildfires or other natural disasters are eligible for the California FAIR Plan. Homeowners who have been non-renewed by their insurance company for claims history or do not meet certain underwriting eligibility guidelines may also be eligible for the California FAIR plan.
- Coverage: The California FAIR Plan provides coverage for fire, wind, smoke, lightning, explosion, volcanic eruption, hail, riots, damage by a vehicle or aircraft, and vandalism. It does not cover theft, water damage, liability, or any other types of damage. Homeowners can purchase additional coverage through a separate difference in conditions policy.
- Cost: The cost of the CA FAIR Plan is set by the state and is the same no matter the insurance broker you use the get a policy. The premium is based on the amount of coverage and the location of the property.
- Limitations: The California FAIR Plan has limitations on the amount of coverage that can be provided. In some cases, homeowners may need to purchase additional coverage through a separate policy to fully protect their property.
The CA FAIR Plan serves as an insurer of last resort, ensuring that homeowners have access to fire coverage even if traditional insurers decline their applications. It is a valuable insurance option for homeowners who are unable to get coverage through traditional insurance companies. Homeowners should carefully consider their options and work with an experienced insurance agent to figure out the best coverage for their needs.
This blog post is not offered, and should not be relied on, as insurance advice. You should consult an insurance agent for advice in specific situations.