State moves to help homeowners left uninsurable by wildfires

At least a half dozen homes burned near Geysers Rd & Red Winery Rd. in October 2019 (Sonoma Fire twitter)

California homeowners struggling to find or keep their insurance after several years of catastrophic wildfire seasons may get some relief from state Insurance Commissioner Ricardo Lara in 2020.

“In the wake of devastating wildfires, insurance non-renewals are on the rise across the state,” Lara said Thursday morning during a news conference. When homeowners lose their insurance, or are unable to get a policy due to the danger of wildfire, they can turn to the Fair Access to Insurance Requirements (FAIR) Plan — a state-mandated program for difficult-to-insure properties. “What we’ve been seeing is, essentially, insurance companies dropping folks, sending them to the FAIR Plan and the FAIR Plan not being a comprehensive product that consumers can rely on,” Lara said.

Starting April 1, the coverage limit will increase from $1.5 million to $3 million — a move that state officials say makes sense in California’s real estate market as homeowners often find that actual wildfire damage is exceeding their coverage. State law requires the FAIR Plan to offer a comprehensive homeowners policy as an “insurer of last resort.”

Amy Bach, executive director of the insurance advocacy nonprofit United Policyholders, called it a “take all comers” policy. Her organization has been hearing from homeowners unable to find affordable insurance through traditional channels. “The good news is we do have a safety net in California,” Bach said. In addition to increased coverage limits, Lara has also pushed the FAIR Plan to provide additional transparency around their meetings, and to allow the participation of the state Department of Insurance.

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