November 29, 2023 The Newspaper Serving LGBT Los Angeles

California FAIR Plan For Fire Insurance Sees Massive Rate Increases

By Karl D. Susman

The California FAIR Plan Association was created in July 1968 following a series of brush fires and riots in the 1960s. Since then, it has been the organization of last resort for agents and brokers to obtain basic fire insurance for their clients. Times are certainly changing. Due to the multiple brush fires throughout California over the last several years, most insurers have either stopped writing fire insurance in many areas while others have filed for massive rate increases. Non-admitted insurance companies have also begun to increase premiums significantly to the tune of over 500% or more while FAIR plan is taking rate increases over 20%.

The standard and even substandard market for homeowners and fire insurance is tightening
Karl D. Susman

It is no surprise as the standard and even sub-standard market for homeowners and fire insurance tightens more agents and brokers are looking to place their clients with the FAIR plan. The FAIR plan has enacted new guidelines for eligibility on new business being written through the organization. Brokers submitting applications to the FAIR Plan will now be required to e-certify that a diligent search was made as mandated by the California Insurance Code. The certification states that a diligent search has been completed as pursuant to California Insurance Code section 10093(a). This states in part that the Broker has made an attempt to place this risk with a standard insurer prior to submitting the application to the FAIR plan.

Additionally, recognizing the extremely limited coverage that the FAIR plan offers, a recent bulletin was sent to agents and brokers to remind them that the policies they offer do not cover such things as water damage, liability, theft, worker’s comp etc. This bulletin to me signifies the fact that the FAIR plan knows it will be seeing claims for these types of losses and they are putting producers on notice to be certain and obtain that important coverage elsewhere.

The FAIR plan may be seeing more claims, so customers are receiving a new checklist with policies and renewals.

Karl D. Susman

Supplemental coverage for a FAIR plan policy comes in many forms, most frequently a Difference in Conditions policy (DIC). In addition, FAIR plan policyholders are receiving a new insert with their new policies and renewal policies. This insert includes an “Annual Insurance Checklist for FAIR Plan Policyholders” and lists items such as “Shop around at least annually for coverage with other insurers” and “Call insurance companies on your own.” It also states to contact your Broker with questions about coverage including coverage that is not offered by the FAIR plan. Finally, it goes as far as to say that reviewing the coverage you have is “your responsibility” and it is underlined just like that. It seems clear by notices sent to agents and FAIR plan policyholders that the message is get better coverage elsewhere. So if the FAIR plan is telling us to look elsewhere for better coverage and even provides a list of types of coverage to look for, the begging question is are people going to pay attention now or is this just a massive claim bubble waiting to burst?

I believe that not only are agents and brokers going to be in for a huge influx of claims from FAIR plan customers who thought they had more coverage, pointing to these continual reminders and warnings from FAIR plan will do little to protect them from the onslaught of potential litigation that will follow. At some point a permanent solution will need to be found to solve the chronic risk that now exists in California; wildfires. There is absolutely precedent for this too.

Other states have either state or federal programs for chronic risks already in place such as the National Flood Insurance Program for Flood damage, Windstorm Insurance, Hurricane insurance and more. Remember the concept of insurance is to insure against the potential for a loss. When there is an almost certainty for a loss then it isn’t possible for private insurers to shoulder the losses that will come.

Karl Susman, owner of Susman Insurance Agency in Los Angeles, California has been helping clients obtain insurance for over 26 years.  He also is an Insurance Expert Witness for complex litigation. 

Related Posts

Westfield Century City Unveils Enchanting 25 Days of Christmas Festivities

November 29, 2023

November 29, 2023

A Winter Wonderland With Festive Delights at Westfield Century City By Dolores Quintana Even though it’s only the week after...

Silencing Classrooms: The Alarming Surge of Educational Gag Orders Across U.S. States

November 28, 2023

November 28, 2023

PEN America’s Report Unveils Disturbing Trends in 2023 Legislation By Dolores Quintana Mostly conservative lawmakers all over the United States...

Bloomsybox Challenges Christmas Movie Fans to Rate Hallmark Christmas Movies

November 28, 2023

November 28, 2023

Applicant Chosen Will Receive Prizes and Cash Worth $2,500  By Dolores Quintana A flower delivery company, Bloomsy Box, is challenging...

Attorney General Rob Bonta Advises Californians to Exercise Caution Giving Tuesday

November 28, 2023

November 28, 2023

Tips and Resources Ensure Safe Donations Amid Rising Threats By Dolores Quintana Attorney General Rob Bonta, in collaboration with the...

Bimbos Theatre Company and Student Committee for the Arts Host Drag Event

November 27, 2023

November 27, 2023

UCLA Charity Drag Showcase Unites Students for LGBTQ+ Advocacy By Dolores Quintana On November 28th at 7 pm, the UCLA...

Major Cantaloupe Recall Expands: Brands, Stores, and Products Affected

November 27, 2023

November 27, 2023

Cantaloupe Products Linked to Ongoing CDC Investigation in 28 States By Dolores Quintana In an expanded recall from the FDA...

USC Forecast Predicts Rising Rents and Commercial Real Estate Financing Struggles

November 26, 2023

November 26, 2023

Report Sparks Concerns for Real Estate Development in Southern California By Dolores Quintana  The University of Southern California’s Lusk Center...

Historic Transition: The Abbey Food & Bar Changes Ownership in West Hollywood Landmark Deal

November 26, 2023

November 26, 2023

Entrepreneur David Cooley Forges Agreement to Sell Iconic LGBTQ+ Venue By Dolores Quintana Entrepreneurs David Cooley and Tristan Schukraft have...

James Whale’s Former Estate, Home to the creator of “Frankenstein,” Hits Market at $7.245 Million

November 26, 2023

November 26, 2023

Iconic Tuscan-Style Villa, Restored to Old Hollywood Glory, Offers Breathtaking Views in Los Feliz By Dolores Quintana A majestic Los...

Additional Free At-Home COVID Tests Now Available From U.S Government

November 23, 2023

November 23, 2023

Get Up to 8 Tests at No Cost, Rapid Results, Easy Access, and Free Shipping By Dolores Quintana In an...

West Hollywood’s WeHo Mobility Pop-up: Illuminate Your Ride, Engage in Mobility Dialogue

November 23, 2023

November 23, 2023

West Hollywood Bicycle Coalition to Distribute Free Bike Lights By Dolores Quintana The City of West Hollywood is set to...

Unexplained Dog Respiratory Illness Sparks Public Health Investigation in Los Angeles County

November 23, 2023

November 23, 2023

Atypical Canine Infectious Respiratory Disease (aCIRD) Prompts Urgent Measures By Dolores Quintana Los Angeles County Department of Public Health’s Veterinary...

PleasureMed Launches as West Hollywood’s Premier Cannabis and Culinary Haven

November 21, 2023

November 21, 2023

Discover the Future of Cannabis Lounges and Farm-to-Table Dining By Dolores Quintana PleasureMed, the avant-garde establishment spanning 6,500 square feet...

Spread Holiday Cheer: Volunteer or Donate to Charitable Annual Efforts in Los Angeles

November 21, 2023

November 21, 2023

Gobble Gobble Give, Pink Taco, and PATH  Feed the Homeless on Thanksgiving By Dolores Quintana More than one charitable organization...

Thanksgiving Dinner and Shopping Options: What Stores and Restaurants Will Be Open on the Holiday

November 21, 2023

November 21, 2023

Explore the Options for Open Stores and Restaurants on Thanksgiving Day By Dolores Quintana Thanksgiving is a beloved holiday, but...