Introduction to the California FAIR Plan
The California Fair Access to Insurance Requirements, or FAIR Plan was created in 1968 by the California Legislature. The FAIR PLan established a fire insurance pool of all admitted insurers in California, and issues policies on their behalf. This means that the FAIR Plan is financially supported by private insurers, not the state government or taxpayers.
What Kinds of Insurance Does the California FAIR Plan Offer?
The California FAIR Plan provides basic Dwelling Fire Policies (also known as DP-1, DP-2, and DP-3) for home and business owners. Unlike traditional homeowner’s insurance policies (also known as HO-3 or HO-5) that protect against a wide range of perils, Dwelling Fire policies protect against just three named perils: Fire & Lightning, Internal Explosion, and Smoke.
FAIR Plan customers can also add Earthquake coverage through the California Earthquake Authority, although the FAIR plan cannot provide standalone earthquake policies. To purchase Earthquake coverage, you must also purchase a FAIR plan.
Does the California FAIR Plan Sell Homeowners Insurance?
Yes, the California FAIR Plan sells home insurance policies - but they provide significantly less coverage than a traditional HO-3 (homeowners), or HO-6 (condo) policy. A FAIR Plan policy provides basic property insurance - only your dwelling and personal property are automatically covered.
What does the California FAIR Plan cover?
A standard California FAIR Plan policy only covers your Dwelling and Personal Property against a small number of perils; Smoke, Fire & Lightning, and Internal Explosion. It is also an Actual Cash Value (ACV) policy. A FAIR Plan policy can be modified to include more coverage, for a higher premium. Some of those endorsements include:
- Other Structures coverage
- Fair Rental Value coverage
- Dwelling Replacement Cost Value (RCV) coverage
- Personal Property RCV coverage
- Ordinance/law coverage
- Vandalism and malicious mischief coverage
- Debris removal coverage
- Inflation guard protection
Some customers also fill in the gaps left by a FAIR Plan by purchasing a Difference in Conditions (DIC) policy. DIC policies exclude Smoke, Fire & Lightning, and Internal Explosion, but cover other perils typically covered by an HO-3 policy and provide liability insurance. Only some carriers, like Bamboo, carry DIC policies. You can also find a list of additional providers here.
CA Fair Plan
Traditional HO-3 Policy
Provides basic property coverage, only Dwelling and Personal Property coverage are automatically covered.
Provides comprehensive property coverage. By default, HO-3 policies cover Dwelling, Other Structures, Personal Property, Loss of Use, Personal Liability, and Medical Payments.
Only protects against smoke, fire & lightning, and internal explosion.
Provides open-peril coverage on your Dwelling and Other Structures, and covers your Personal Property against 16 named perils.
Actual Cash Value (ACV) - Replacement Cost protection on your home, ACV on your Personal Property, with the option to upgrade Personal Property.
Doesn’t provide liability or medical payments coverage Personal Liability and Medical Payments are standard coverages.
Who is eligible for the California FAIR Plan?
The California FAIR Plan is a last-resort insurer that won’t work for every customer or property. Customers must show that they’ve been denied coverage in the private insurance market more than once, and can only purchase policies through a licensed insurance broker in California.
Fair Plan Dwelling policies can cover: owner-occupied dwellings in 1-4 unit properties, seasonal rentals, rentals with 1-4 units, tenants renting an apartment or single/multi-unit building, condo unit owners. As of 2019, FAIR Plan policies can cover homes with a rebuild cost of up to $3 million.
Who is not eligible for the California FAIR Plan?
The California FAIR Plan is not available to homes that are:
- Vacant and/or unoccupied for 50% or more of the year.
- Damaged, with pending repairs
- Tied to illegal activity as defined by state and federal law
How do you Buy a California FAIR Plan policy?
If you’ve shopped for insurance for a home and can’t find coverage through standard carriers, the California FAIR Plan provides an alternative option. You can only buy FAIR Plan coverage through a licensed broker or agent.
If your broker determines you’re eligible for coverage, they’ll help you fill out the application, choose coverage, and determine your premium estimate. If you’ve upgraded your home’s safety features with home-hardening or other fire mitigation, you can also qualify for discounts through the FAIR Plan.
Pros And Cons of the California FAIR Plan
Pros
- Provides essential coverage for certain high-risk locations or for properties that other insurance companies won’t cover.
- Purchasing a FAIR Plan policy can prevent expensive lapses in coverage if you’ve been dropped or canceled by your current carrier.
- Customers can upgrade their coverage through some endorsements, for an additional premium.
Cons
- The California FAIR Plan is typically more expensive than traditional homeowners insurance.
- Coverage through a FAIR Plan policy is extremely limited with a focus on fire coverage, and no liability protections.
- Significant increases in demand have increased wait times for FAIR Plan applications, claims, and payment processing.
🔒 We don't sell your information - no spam, and no calls
Get Customer Support For Or File A Claim With The California FAIR Plan
The California FAIR Plan offers a claims form for policyholders to use here. You can also contact them M-F, 8:30 a.m. - 4:00 p.m. at (800) 339-4099 or (213) 487-0111.
Frequently Asked Questions
Should I Buy a California FAIR Plan policy?
Buying a California FAIR Plan policy should only be your last resort, after you’ve considered traditional homeowners policies. But, if you haven’t been able to find coverage for your home, have a home that’s temporarily difficult to insure, or just need basic fire coverage - the FAIR Plan could be your best option. The cost of a FAIR Plan policy can vary based on factors like location and coverage limits, so it's best to get a quote first. Get home insurance quotes for FAIR Plan alternatives online or contact a FAIR Plan broker if you’re ready to buy a policy.
How much does a California FAIR Plan cost?
In 2022, the average cost of a FAIR Plan policy combined with a difference in conditions policy was $3,200. Like any insurance, the cost of a California FAIR Plan policy can vary significantly depending on where you live, your property, the coverage, and additional endorsements. Typically, FAIR Plan policies cost more than standard homeowners insurance and their cost can increase even more if you purchase additional coverage through a difference in conditions policy.
Is Using the California FAIR Plan Worth It?
Using the California FAIR Plan is worth considering if you've exhausted all other options for obtaining property insurance and cannot find coverage through regular insurers due to high-risk factors such as location or property history. While it may come with higher costs and limited coverage compared to traditional insurance, the FAIR Plan provides a vital option for homeowners who otherwise might be uninsured.
Overwhelmed by your homeowners or landlord insurance options? Try Coverage Cat for easy, online quotes and get expert guidance on your FAIR Plan alternatives.
Sagnik in CA saved thousands a year on property insurance
Principal @ Esseltek
Literally the most seamless experience ever. No agent could get a homeowners insurance policy in the time frame that CoverageCat got it done.
I will be using them again for the rest of my assets.
🔒 We don't sell your information - no spam, and no calls
