Posted on 01/22/2025 12:48:19 PM PST by Angelino97
Once debris from the Los Angeles County wildfires is cleared and rebuilding begins, attention will likely shift to the financial health of a small, but growing California fire insurance provider.
The California FAIR Plan has an outsized share of the state’s riskiest policies because it is the insurer of last resort for home and building owners who can’t get coverage elsewhere.
If the FAIR Plan is unable to pay all of its claims, virtually every insured homeowner in the state could end up paying a portion of the LA County fire losses.
The nonprofit “Fair Access to Insurance Requirements” Plan is a private insurance pool created by the state, but operated jointly by fully licensed property and casualty insurance providers in the state. It provides insurance for fire damage only. Homeowners must seek additional liability, theft and other homeowner coverage from separate “wraparound” policies from private insurers.
Last week, the FAIR Plan disclosed that it covers about 22% of structures in the Palisades Fire zone and 12% of structures in the Eaton Fire area.
Potential exposure in the Palisades fire totals more than $4 billion, the FAIR Plan reported in an update Friday, Jan. 17. Its potential exposure in the Eaton fire is $775 million.
The FAIR Plan must pay the first $900 million in claims before tapping into back-up plans from “re-insurance” companies — essentially insurance for insurers. Re-insurance would pay the bulk of the next $4.9 billion in claims, leaving the FAIR Plan responsible for all losses over $5.78 billion.
A spokesperson for the FAIR Plan declined to say how much money it has in reserves, nor would she confirm the New York Times’ report that U.S. Sen. Alex Padilla’s office said the plan had just $377 million as of Jan. 10.
(Excerpt) Read more at dailynews.com ...
Wildfire mitigation is much cheaper than wildfire recovery.
Why wouldn’t they be on the hook
I think FAIR doesn’t mean what you think “fair” means.
California socialism on the march.
California FAIR
While that may be true, it is morally far better to not do the mitigation and save the delicate habitat of the endangered Nurovian leaping lemur. Burned houses and dead people are just collateral damage and are at best shruggable. (/enviro-weenie)
Heard reports mobile homes are quickly becoming popular in these burned out areas.
Yes, taxpayers and claimants will end up shouldering the costs. The Government has no money, only tax revenues.
Because that is how insurance works?
But not to worry, they will find a way to federalize this.
When I was stationed at Ft Bragg, they had lots of tall pine trees and scrub oak.
And all over the place, they had these things called “fire breaks”.
President Trump should require them before they getany taxpayer money.
What is so unusual about that. It happens all the time in California ... group punishment.
The FAIR Plan was established by statute (California Insurance Code sections 10091 et seq.) in August, 1968 as an insurance placement facility." Important to note: "All licensed property/casualty insurers which write basic property insurance required by Insurance Code sections 10091(a) and 10095(a) are members of the FAIR Plan. The FAIR Plan issues policies on behalf of its member companies. Each member company participates in the profits, losses and expenses of the Plan in direct proportion to its market share of business written in the state."So all insurers licensed in Cal will be obligated to "kick in."
Going forward, one might well see some insurers not wanting to continue to cover in the state.
EVERY DRIVER PAYS FOR THE DRIVING HABITS OF UNINSURED INVADERS & DRUNKS, ETC.
California homeowners? We’ll ALL be paying. And paying. And paying...
When Reagan was governor.
Was there a Democratic state legislature with a Veto-proof majority? I myself don't know.
The FAIR Plan issues policies on behalf of its member companies. Each member company participates in the profits, losses and expenses of the Plan...
So the FAIR Plan, as originally conceived, anticipated profits?
President Reagan was then Governor Reagan, and the State Senate was equally tied at 20-20, while the Assembly was Narrowly Democrat, 42 to 38. In that time, FAIR was expected to be small potatoes, and really only for the few who couldn't get insurance through commercial companies and brokers.
Something like less than 3 percent of the state market then and not planned to make a profit, and so it looked reasonable.
It's grown into a mess, with large numbers of owners, homes and commercial properties now having become reliant on it. The "costs" will be assigned by "share" of the overall market to every insurer. Therefore, will hundreds of billions be involved in payouts, and the article's notion that all property owners will be getting premium increases is very apt.
Sad for all, with the root cause not being Reagan from 57 years ago, but because of all the ensuing and growing mismanagement and ineptitude which has grown like weeds and "caught fire" only to do terrible damage.
Remember Wilshire's Miracle Mile, once upon a time? La Golondrina Cafe? POP? California's natural beauties are wonders. California's progessives are not.
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