California FAIR Plan Requests $1 Billion for Los Angeles Wildfire Claims
The California Department of Insurance has announced that the FAIR Plan, a state-run insurance program for homeowners unable to obtain private coverage, requires an additional $1 billion to cover claims resulting from the Los Angeles wildfires.
The FAIR Plan is a risk-sharing pool funded by major private insurers, providing policies to homeowners whose properties are deemed too risky for standard coverage. The program offers basic coverage with higher premiums.
As of 2024, the FAIR Plan had over 452,000 policies in effect, a significant increase from 2020. Insurers will be responsible for 50% of the additional funding, with the remainder passed on to policyholders as a percentage of premiums, subject to approval by the Insurance Department.
This request marks the first time in over 30 years that the FAIR Plan has sought additional funding. The Eaton and Palisades Fires, which began on January 7, resulted in the destruction of nearly 17,000 structures and the loss of at least 29 lives.
Insurance Commissioner Ricardo Lara stated that the action was necessary to ensure that the FAIR Plan meets its obligations to policyholders. He emphasized the importance of supporting wildfire survivors, who rely on FAIR Plan claims to cover essential expenses.