SACRAMENTO, California — Homeowners associations struggling to find fire insurance are set to finally qualify for coverage from the state’s insurer of last resort eight months after a deal first announced by Insurance Commissioner Ricardo Lara.
What happened: Lara announced Friday that he had formally approved a new plan by the FAIR Plan Association to increase its commercial property coverage limits. The FAIR Plan must now make coverage available for up to $20 million per building and $100 million per overall location, up from just $20 million per location.
“This targeted FAIR Plan expansion helps meet the urgent needs of homeowners associations, affordable housing developers, farmers, builders, and business owners who are being priced out or left without coverage altogether,” said Lara. “It is a short-term solution with long-term benefits — providing necessary insurance access while we continue implementing comprehensive reforms to restore a competitive and reliable market in California.”
Why this matters: The change is meant to extend the last-resort insurance to properties with multiple buildings worth tens of millions of dollars, like wineries and condominium complexes, that previously exceeded the FAIR Plan’s limits and found themselves with no other options for wildfire coverage as traditional insurers fled the market. Builders and homeowners associations had argued that the gap was hampering the construction of affordable housing.
