California to Expand Fire Insurance Plan
California Insurance Commissioner Ricardo Lara said on Nov. 14 that as more companies refuse to provide fire insurance to homeowners, a plan once meant to be a last resort will be expanded. Funded by insurance companies, the FAIR Plan was created to provide bare-bones fire insurance to those turned down by traditional providers. The plan currently covers up to $1.5 million in losses related to fire damage, but by next spring, it will cover up to $3 million and include water damage and personal liability coverage as well.
“I am taking this action after meeting with thousands of California homeowners across the state who are struggling to find coverage to protect their homes,” Lara said. “This crisis requires the FAIR Plan to provide a comprehensive option for Californians who have no other option for homeowners insurance.” The state’s plan was set up in 1968 and all its funding comes from property/casualty insurance companies doing business in California. The plan receives no funding from taxpayers
California Department of Insurance figures indicate that insurance companies have dropped nearly 350,000 home insurance policies in the last four years in areas at high risk for wildfires.