Homeowners across California may soon feel the impact of a major financial decision made by state regulators last month. The state’s last-resort insurer, which provides coverage for those unable to secure policies on the private market, received a massive cash injection from private insurers to help cover an overwhelming number of wildfire claims in Southern California.
The California Fair Access to Insurance Requirements — otherwise known as the Fair Plan — requested the $1 billion assessment after it exhausted its coffers to cover one of the most expensive wildfire disasters in modern history.
And now, the devastation isn’t just hitting those who lived in the fire zones, it’s digging into Californians all over the state.
Under this arrangement, private insurers are permitted to recoup half of the assessment costs by imposing a temporary surcharge on their policyholders, translating to an approximate $60 fee per customer. This marks the first such assessment in over three decades, reflecting the escalating challenges insurers face amid increasing wildfire risks in California.
This move aims to stabilize the insurance market and help those affected by the devastating Eaton and Palisades fires — but it could also spur temporary higher costs for homeowners.
“Wildfire survivors can’t cash ‘what ifs’ to pay for food and rent, but they can cash FAIR Plan checks,” said California Insurance Commissioner Ricardo Lara.
