California orders more insurance options for wildfire areas
SACRAMENTO, Calif. (AP) — California Insurance Commissioner Ricardo Lara has ordered the state’s “insurer of last resort” to offer more comprehensive coverage for homeowners who can’t buy private insurance because they live in areas threatened by wildfires.
The California Fair Access to Insurance Requirements Plan, known as the FAIR Plan, sells insurance to homeowners who can’t purchase it through no fault of their own. The plan is mandated by state law and funded by insurance companies.
Most of the FAIR Plan’s coverage only applies to damage from fires and other disasters. But Lara wants them to cover other things, too, like water damage and theft. The FAIR Plan Association sued, arguing state law only requires them to provide “basic property insurance.”
In July, a state judge ruled Lara had the authority to order the FAIR Plan to offer the additional coverage. The court asked Lara to issue a new order with some changes about liability. On Friday, Lara issued that new order.
The FAIR Plan Association said in a statement Friday it is reviewing Lara’s order and “working in good faith to address issues raised by the court.” The association said Lara’s order would have “unintended consequences,” including “higher rates for policyholders.”