California's FAIR Plan, which provides insurance to homeowners who can't get private coverage, needs an additional $1 billion to cover claims from the recent Los Angeles wildfires. The plan, funded by all major private insurers, is facing an estimated $4 billion loss from the Eaton and Palisades Fires. The state Insurance Department will require all insurers to share half the cost, with the remaining amount passed on to policyholders as a one-time fee.
Chris Wilson walks through the remains of his home, consumed by the Eaton Fire, in Altadena, Calif., Thursday, Jan. 30, 2025.
The FAIR Plan is an insurance pool that all the major private insurers pay into, and the plan then issues policies to people who can’t get private insurance because their properties are deemed too risky to insure. The plans provide high premiums and basic coverage. There were more than 452,000 policies on the Fair Plan in 2024, more than double the number in 2020.
All insurers doing business in California will have to bear half the cost and can pass on the rest to all policyholders in the form of a one-time fee as a percentage of premiums. Insurers can collect that cost in the next two years. The state Insurance Department must approve those costs.
It’s the first time the Fair Plan has sought approval for additional money in more than 30 years, the department said.
CALIFORNIA WILDFIRES FAIR PLAN INSURANCE PROPERTY DAMAGE RECOVERY
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