Court delivers win for homeowners in expanding FAIR Plan coverage
This week a
The ruling by
Following that ruling, Commissioner Lara issued an Amended Order 2021-2 to the FAIR Plan.
These are typically included in a standard comprehensive homeowners policy, but not offered under the FAIR Plan's limited fire policy.
FAIR Plan policyholders who want additional coverage must purchase a separate difference in conditions, or DIC, policy offered by a private insurance company.
"This ruling is a win for homeowners and an essential part of our ongoing strategy during this unprecedented time in our state. It upholds my authority to implement measures that enhance the availability and affordability of insurance coverages for consumers. While we continue to pursue long-term insurance solutions to safeguard Californians from climate change, it's essential that homeowners have a strong short-term option in the California FAIR Plan," said Lara.
"Requiring Californians to purchase separate insurance policies only results in higher costs and greater confusion, leaving them on the hook for uninsured damage from a winter storm or burst pipe. Many FAIR Plan policyholders are seniors or families who cannot afford to pay these unexpected costs out-of-pocket. The sooner that the FAIR Plan can offer a more comprehensive policy option, the better for many Californians. This ruling is a step forward in achieving a balanced and robust insurance market that meets the needs of Californians. I will continue to put the needs of
The FAIR Plan is
Many FAIR Plan policyholders do not, and cannot, purchase a difference in conditions policy, increasing the coverage gap for vulnerable communities.
Modernizing the FAIR Plan to meet Californians' coverage needs is a key goal of Commissioner Lara's Sustainable Insurance Strategy, which he announced in September.
The FAIR Plan has approximately 330,000 residential policies in the state as of
According to
In 2022, the FAIR Plan insured approximately 270,000 residential policies. About 200,000 of these policies insured an owner-occupied dwelling, constituting roughly 3.1% of the state's homeowners' market.
As of
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