California FAIR Plan

The FAIR Plan (Fair Access to Insurance Requirements) is a last-resort insurance program created by state law for property owners who cannot obtain insurance in the traditional market due to high fire risk. It offers basic dwelling coverage but doesn't include liability or personal property. It's administered by all insurers operating in California.

FAIR Plan typically costs 2-3 times more than traditional homeowners insurance. A home that would normally pay $1,500 annually might pay $3,000-4,500 with FAIR Plan. When you add a DIC policy for complete coverage, total cost can be 3-4 times traditional insurance.

FAIR Plan only covers the dwelling structure. For complete coverage, you need to purchase a separate DIC (Difference in Conditions) policy that adds liability, personal property, and additional living expenses. The combination of FAIR Plan + DIC gives you coverage similar to traditional homeowners insurance.

To leave FAIR Plan: 1) Improve your property's fire protection (defensible space, fire-resistant materials), 2) Seek high-risk specialty insurers or surplus lines carriers, 3) Wait for market conditions to improve, 4) Consider relocating to a lower-risk area. Review options annually.

No, FAIR Plan doesn't cover earthquakes or floods. You need separate policies: earthquake insurance from CEA (California Earthquake Authority) and flood insurance from NFIP (National Flood Insurance Program). These coverages are in addition to FAIR Plan and DIC policy.

FAIR Plan rarely rejects applications, but may do so if: 1) Property doesn't meet minimum safety standards, 2) It's uninhabitable, 3) Has unresolved code violations, 4) Not located in California. If rejected, correct identified problems and reapply.

While not technically required by law, most agents request it to document that you tried to obtain traditional insurance first. The letter should be from the last 90 days and from a California-admitted insurer. Some companies provide declination letters specifically for FAIR Plan applications.

Major companies offering DIC policies include: Mercury Insurance, Travelers, Chubb, PURE Insurance, and various surplus lines carriers. Availability varies by location and property condition. Your FAIR Plan agent can usually help find DIC coverage.

Yes, FAIR Plan has maximum limits: $3 million for single-family homes, $1.5 million for condominiums, $500,000 for mobile homes, and $20 million for commercial properties. If your property is worth more, you'll need additional excess coverage from another insurer.

FAIR Plan adjusts rates annually based on losses and operating costs. Recent increases have averaged 15-20% annually due to increased wildfire activity. Rates are regulated by the California Department of Insurance and require approval before implementation.