The California FAIR Plan (California Fair Access to Insurance Requirements) is a fire insurance program created by the state of California that is used by property owners who cannot find private market insurance coverage.[1][2][3] The FAIR Plan was established in August 1968 by a statutory amendment to the California Insurance Code (specifically, section 10091 et seq.[4][5]), and is regulated by the office of the California Insurance Commissioner. The plans are typically more expensive and provide less coverage than commercial plans.[6] If the FAIR Plan does not have the money to pay out all claims, it collects money from insurance companies that operate in California.[6]

According to data from 2020, the FAIR Plan covers 2.5% of the statewide market share, but 20.4% of the market share in ZIP codes at high risk from wildfires.[7] Between 2020 and 2024, the number of homes covered by FAIR Plan policies more than doubled, while the Plan's total exposure (including commercial properties) nearly tripled.[8] Between 2023 and 2024, the number of homes in the ZIP code affected by the January 2025 Palisades fire covered by the FAIR Plan almost doubled.[6]

As of January 17, 2025, the FAIR Plan estimated that it covered 22% of the structures affected by the Palisades Fire, with a potential exposure upwards of $4 billion, and 12% of the structures affected by the Eaton Fire, with a potential exposure of over $775 million.[9] As of January 10, 2025, it had only $377 million available to pay out claims, in addition to $5.75 billion in reinsurance.[10] However, FAIR can only access reinsurance after it has paid out $900 million in claims.[9] To make up the shortfall, according to Consumer Watchdog, all California homeowners could face a $1,000 to $3,700 surcharge as FAIR can seek money from private insurers who would likely pass the charge to their customers.[11][12]

See also

References

  1. ^ Eaglesham, Jean (October 4, 2023). "Homeowners Flock to Last-Resort Insurance Policies". WSJ.
  2. ^ Darmiento, Laurence (July 30, 2024). "L.A. consumer group calls FAIR Plan insurance reforms an industry 'bailout'". Los Angeles Times. Archived from the original on January 11, 2025.
  3. ^ Darmiento, Laurence (December 30, 2024). "State takes final step to fix California's troubled home insurance market". Los Angeles Times.
  4. ^ California Insurance Code section 10090 et seq.
  5. ^ "About - The California FAIR Plan". The California FAIR Plan. Archived from the original on February 12, 2025. Retrieved February 24, 2025.
  6. ^ a b c Flavelle, Christopher (January 8, 2025). "California Wildfires Threaten Insurers Already Teetering From Climate Shocks". The New York Times – via NYTimes.com.
  7. ^ Boomhower, Judson; Fowlie, Meredith; Gellman, Jacob; Plantinga, Andrew (June 2024). "How Are Insurance Markets Adapting To Climate Change? Risk Selection And Regulation In The Market For Homeowners Insurance". Working Paper Series. National Bureau Of Economic Research. doi:10.3386/w32625. Retrieved January 14, 2025.
  8. ^ "Key Statistics & Data". The California FAIR Plan. California FAIR Plan Association. Archived from the original on January 15, 2025. Retrieved January 14, 2025.
  9. ^ a b Ma, Jason (January 18, 2025). "California's insurer of last resort has potential exposure to LA wildfires of nearly $5 billion and reinsurance of $5.78 billion". Fortune. Retrieved January 24, 2025.
  10. ^ Flavelle, Christopher (January 14, 2025). "The California FAIR Plan Faces Crucial Insurance Test". The New York Times. Archived from the original on January 15, 2025. Retrieved January 14, 2025.
  11. ^ Adamczyk, Alicia (January 13, 2025). "California homeowners could be on the hook for $1,000 or higher surcharge if FAIR Plan runs dry". Fortune.
  12. ^ Frank, Thomas (March 18, 2024). "California's insurer of last resort is a 'ticking time bomb'". E&E News by POLITICO. Archived from the original on January 14, 2025.
Allikas: http://en.wikipedia.org/wiki/California_FAIR_Plan
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