GUIDELINES FOR OBTAINING COVERAGE TO CLOSING ESCROW IN A TIMELY MANNER
Advance Planning: Potential property buyers and/or policyholders seeking to refinance should contact an insurance broker of their choice when they first start the escrow process. This gives the insurance broker adequate time to make a diligent search of the insurance marketplace based on the property’s condition and insurance carriers’ underwriting requirements.
Do not wait until the last minute to attempt to obtain coverage.
Escrow officers or real estate brokers that refer business to insurance brokers should advise their broker contacts of a potential closing as soon as they receive the signed documents from the potential buyer to open escrow.
The FAIR Plan does not have agents. No one can bind coverage or commit the FAIR Plan in any way. Coverage does not go into effect until monies have been received in the FAIR Plan office. Brokers registered with the Plan’s online system for residential properties can obtain quotations and mid-term policy changes expeditiously.
The average escrow closes between 30 to 45 days. The FAIR Plan’s new business quotation is valid for 60 calendar days. In cases where escrow has been extended, the insurance broker should resubmit to obtain another quotation before their initial quotation expires.
Existing FAIR Plan policies can not be assigned over to a new buyer. This also applies to cases where property is being transferred to a family member. A new business application must be submitted on behalf of the new purchaser, or family member(s) with insurable interest.
Simplified Escrow Closing Procedures
Brokers should utilize our online system if possible to expedite the quotation process.
This procedure can change at any time without prior notice.
Why We Are Not Listed In The Best's Rating Guide
The California FAIR Plan Association is a syndicated fire insurance pool comprised of all insurers licensed to conduct property/casualty business in California. The Plan was established under Insurance Code statute (Section 10091 et. al) in August, 1968 as an insurance placement facility.
All property/casualty insurers are members of the Association in compliance with insurance code statute (Section 10095a). The 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.
The A.M. Best’s Rating Guide assigns a financial rating to all insurers with either private or public stock ownership. The financial rating is based on factors such as profitability, liquidity, adequacy of capital and surplus reserves, etc., so that the business community can determine a given company’s financial strength or weakness.
Since mortgage lenders are concerned about the long term financial strength or weakness of any insurer that is providing hazard insurance prior to their issuance of loan monies, the financial rating of a given company is one of the primary means of judging a given insurer’s viability in the marketplace.
The FAIR Plan is not a state agency, or an insurance company. The FAIR Plan is stronger than any single insurer, since it is backed by the capital and surplus of all insurance companies writing property insurance in the state.