FAIR Plan is a critical insurance option for California residents and businesses
Established more than 50 years ago to provide insurance options for Californians, the FAIR Plan’s mission is to protect consumers. The Department of Insurance, led by Insurance Commissioner Ricardo Lara, exercises oversight under California law to make sure the FAIR Plan addresses the changing needs of Californians.
“I am using my oversight to make sure all Californians have options for coverage that meet their needs. While the FAIR Plan has a long history of protecting consumers it must continue to respond to climate change and future threats.” – Commissioner Lara
While created by the Governor and Legislature, the FAIR Plan is a private association whose day-to-day operations are controlled by insurance companies, not taxpayers.
The FAIR Plan is available to California residents and businesses in urban and rural areas who cannot obtain insurance through a regular insurance company. As of 2020, the FAIR Plan covers less than 3% of residents, meaning more than 97% of Californians have a competitive option for insurance.
Commissioner Lara has taken action to increase coverage options for consumers and convened an investigatory hearing about the FAIR Plan on July 13, 2022. The goal of the hearing was to hear from the public and guide additional actions needed for the FAIR Plan to meet the needs of California consumers far into the future. As part of the investigatory hearing, the Department presented actions the FAIR Plan must take to protect Californians.
How do I get coverage from the FAIR Plan?
First, we recommend you shop the market. Please see our Top Ten Tips for Finding Residential Insurance.
If after shopping the market you are still having difficulty obtaining residential or commercial insurance, you may apply for coverage under the FAIR Plan through an agent or broker licensed to sell property insurance, or you may contact the FAIR Plan directly at800-339-4099. However, we recommend you contact a licensed insurance broker that is registered to sell FAIR Plan coverage. The FAIR Plan Website's Broker Finder tool that can assist you in finding a broker in your area: https://www.cfpnet.com/
What do changes to the FAIR Plan mean for policyholders?
Since taking office in 2019, Commissioner Lara has made improving the FAIR Plan a top priority.
- Higher coverage limits: $3 million for residential policyholders and $20 million for commercial policies per location.
- Safer from Wildfires discounts: Residential and commercial policyholders can obtain a discount of up to 20 percent on the wildfire portion of their FAIR Plan premium for hardening their properties. Contact the FAIR Plan for more information.
- Improved payment options: Allowing monthly payments without a fee and credit card payments with a fee that covers processing cost only.
- Agricultural coverage: Farm buildings are now included, excluding crops which are covered by Federal Crop Insurance and vehicles.
Commissioner Lara is seeking other improvements including a comprehensive residential policy option in addition to the current limited fire policy. The comprehensive residential policy option is currently in progress. When completed, policyholders will be able to obtain coverage for water damage, liability, theft, additional living expenses, and other common coverages without having to purchase a separate Difference in Conditions policy. Policyholders who want that coverage should visit the Difference in Conditions Web page and contact the insurance companies listed.
Through the Sustainable Insurance Strategy, Commissioner Lara reached an agreement with insurance companies to increase writing of insurance while removing policyholders from the FAIR Plan. He is also working to increase commercial coverage to $20 million per structure, assisting HOAs, affordable housing, agribusinesses, and others. Visit the Sustainable Insurance Strategy Web page to learn more.
Commissioner Lara holds FAIR Plan investigatory hearing
Commissioner Lara convened an investigatory hearing about the FAIR Plan on July 13, 2022. The goal of the hearing was to hear from the public and guide additional actions needed for the FAIR Plan to meet the needs of California consumers far into the future. As part of the investigatory hearing, the Department presented actions the FAIR Plan must take to protect Californians.
