California fire insurance FAIR Plan now has 350,000 policyholders

Fire insurance - Home Coverage - California

The coverage of last resort is now writing more policies, but not all plan members are satisfied.

California’s FAIR Plan, its fire insurance coverage of last resort, is now writing a growing number of policies as homeowners turn to the coverage out of a lack of alternatives.

The more policies the FAIR Plan writes, the less satisfied homeowners report being with it.

Homeowners have been registering complaints regarding the poor services they are receiving from their fire insurance companies, about the rising costs associated with coverage, and about the threats they receive about being booted from the plan altogether.

Fire Insurance Costs - Insurance Form

Premiums have been sharply and steadily rising during the last several years for FAIR Plan members. This is causing many homeowners to become very concerned about how they will be able to afford to keep up the coverage and stay in their homes. That said, many FAIR Plan customers don’t have any alternatives as so many insurers have stopped selling this type of coverage in California due to inflation and climate risks, among other reasons.

In 2018, the FAIR Plan had 126,709 policies. Today, that number has ballooned to over 350,000 policies. Homeowners and mortgage brokers alike are now saying that they are struggling with issues such as mortgage closing delays and lost coverage as the FAIR Plan covers a rapidly rising number of properties.

The FAIR Plan Association is a group of insurers California requires to sell fire insurance coverage.

The insurers in the FAIR Plan Association pool must issue coverage to property owners who apply for it and are unable to obtain it elsewhere. Unfortunately, there are a number of challenges occurring as the plan covers such a rapidly growing number of customers.

The FAIR Plan is overseen by the California Insurance Department. Four years ago, it launched an investigation into the plan regarding complaints about cancellations and non-renewals. That said, even after announcements were made promising that changes would be made, customers continue to register complaints about a spectrum of struggles.

The Insurance Department has now proposed a new set of fire insurance regulations that are expected to be finalized before the close of 2024. The goal is to encourage California insurers to start writing wildfire policies again.

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