SEVERE WX : Wind Advisory - Air Quality Alert - Flash Flood Watch View Alerts

California to overhaul insurance plan after wildfires

Californians who lost their home insurance because of the threat of wildfires will be able to buy comprehensive policies next year.

Posted: Nov 14, 2019 3:55 PM

By ADAM BEAM Associated Press

SACRAMENTO, Calif. (AP) — Californians who lost their home insurance because of the threat of wildfires will be able to buy comprehensive policies next year through a state-mandated plan under an order issued Thursday by the state insurance commissioner.

As wildfires threaten the state, insurance companies have been dropping many homeowners who live in fire-prone areas.

Most of those people turn to the California Fair Access to Insurance Requirements Plan, an insurance pool mandated by state law that is required to issue policies to people who can’t buy them through no fault of their own.

But FAIR Plan policies are limited, offering coverage for fires, explosions and limited smoke damage.

California Insurance Commissioner Ricardo Lara on Thursday ordered the plan to begin selling comprehensive policies by June 1 to cover lots of other problems, including theft, water damage, falling objects and liability.

Lara also ordered the plan to double homeowners’ coverage limits to $3 million by April 1.

“You have people that now are being sent to the FAIR Plan and they have no other alternative. They won’t even get a call back from an insurance company to offer them a quote,” Lara said.

The FAIR Plan has been around since 1968. It is not funded by tax dollars. Instead, all property and casualty insurance companies doing business in California must contribute to the plan.

Known as the “insurer of last resort,” the plan has been growing in recent years as wildfires have become bigger and more frequent because of climate change. FAIR Plan policies in fire-prone areas have grown an average of nearly 8% each year since 2016, according to the Department of Insurance.

Likewise, since 2015 insurance companies have declined to renew nearly 350,000 policies in areas at high risk for wildfires. That data comes from the state, and it does not include information on how many people were able to find coverage elsewhere or at what price.

The FAIR Plan is governed by a board of directors appointed by various government officials. Lara says he has the authority to reject its operating plan. On Thursday, he ordered it to submit a new plan within 30 days that includes an option for comprehensive policies and other changes.

California FAIR Plan Association President Anneliese Jivan did not respond to an email seeking comment.

It’s unknown how much the plan’s new policies will cost. But rates for FAIR Plan policies are supposed to break even. The insurance industry must cover any losses. And if the plan generates a profit, that money is given back to insurance companies.

FAIR Plan policies have been limited because, in general, the insurance industry doesn’t want state-mandated plans to compete with private insurance plans. But Amy Bach, executive director of United Policyholders — a nonprofit advocating for consumers in the insurance industry — says her group is “hearing from panicked consumers daily.”

“If (insurance companies) don’t like it, the solution really is to start doing their job and selling insurance again,” she said. “This is an untenable situation.”

Oregon Coronavirus Cases

Data is updated nightly.

Cases: 309841

Reported Deaths: 3569
CountyCasesDeaths
Multnomah50840642
Washington34683272
Marion32181388
Clackamas26315270
Lane23632246
Jackson20753255
Deschutes16401100
Umatilla12552125
Douglas10599185
Linn1030285
Josephine8536163
Yamhill737299
Klamath637891
Polk617770
Malheur475867
Benton454027
Coos406469
Columbia320237
Jefferson310446
Lincoln272829
Union266036
Wasco236739
Crook212137
Clatsop210225
Tillamook179623
Baker171920
Morrow166621
Curry166317
Hood River161635
Harney77115
Grant7538
Lake6608
Wallowa50111
Gilliam1364
Sherman1283
Wheeler651
Unassigned00

California Coronavirus Cases

Data is updated nightly.

Cases: 4620663

Reported Deaths: 67781
CountyCasesDeaths
Los Angeles144072125799
Riverside3561924786
San Diego3481004002
San Bernardino3456445474
Orange3135295344
Sacramento1494582070
Santa Clara1398391835
Fresno1347291868
Kern1343971515
Alameda1155381318
Ventura972861115
San Joaquin965701608
Contra Costa95152917
Stanislaus800341229
Tulare72268894
San Mateo51984607
San Francisco51582605
Monterey49321562
Solano43887312
Santa Barbara42872497
Sonoma39192376
Merced38977532
Placer36118358
Imperial34105753
Kings29822280
San Luis Obispo28136310
Madera21520258
Butte20994230
Shasta20308276
Santa Cruz20066211
Yolo19040239
Marin17020242
El Dorado15864127
Sutter12955152
Napa1219395
Yuba915461
Nevada839485
Humboldt819084
Tehama810983
San Benito706167
Mendocino676471
Lassen634127
Tuolumne605593
Lake596487
Amador486658
Glenn394630
Siskiyou383241
Calaveras334566
Del Norte330134
Colusa289718
Inyo164939
Mono14625
Plumas12076
Mariposa96712
Trinity70510
Modoc6278
Sierra1980
Unassigned1170
Alpine990
Out of CA00
Medford
Cloudy
60° wxIcon
Hi: 67° Lo: 54°
Feels Like: 60°
Brookings
Cloudy
55° wxIcon
Hi: 58° Lo: 55°
Feels Like: 55°
Crater Lake
Cloudy
60° wxIcon
Hi: 46° Lo: 33°
Feels Like: 60°
Grants Pass
Partly Cloudy
60° wxIcon
Hi: 68° Lo: 57°
Feels Like: 60°
Klamath Falls
Cloudy
51° wxIcon
Hi: 57° Lo: 45°
Feels Like: 51°
Heavy rainfall in the early part of the day, more showers expected later and going into Sunday
KDRV Radar
KDRV Fire Danger
KDRV Weather Cam

Community Events