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CALIFORNIA DEPARTMENT OF INSURANCE NEWS RELEASE<\/p>\n
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FOR IMMEDIATE RELEASE:<\/strong><\/p>\n Wednesday, March 29, 2023<\/p>\n <\/p>\n CONTACT:<\/strong> (916) 492-3566 main<\/p>\n Michael Soller: (916) 661-0556 cell<\/p>\n Gabriel Sanchez: (213) 418-5338 cell<\/p>\n <\/p>\n MEDIA E-MAIL<\/strong> INQUIRIES: <\/strong>cdipress@insurance.ca.gov<\/a><\/p>\n <\/p>\n Commissioner Lara and FAIR Plan reach agreement to increase commercial coverage limit to $20 million<\/strong><\/p>\n This important adjustment more than doubles existing coverage limit options for California businesses\u00a0<\/em><\/p>\n <\/p>\n LOS ANGELES – <\/strong>As part of his comprehensive effort to give more insurance options to California residents and businesses, Insurance Commissioner Ricardo Lara today announced the California FAIR Plan Association has agreed to more than double its existing commercial coverage limits to $20 million for businesses unable to find coverage in the normal insurance marketplace. The FAIR Plan is an association comprised of all insurers authorized to transact basic property insurance in California, and designed to be the state\u2019s property \u201cinsurer of last resort,\u201d writing coverage for businesses and residences when other insurance options are not available.<\/p>\n Commissioner Lara and the FAIR Plan have been working on this issue since the Commissioner\u2019s investigatory hearing into the FAIR Plan<\/a> last July where homeowners associations, youth recreational camps, agricultural groups, and other businesses spoke about the growing need for greater commercial coverage limits. Prior to Commissioner Lara taking office in 2019, the FAIR Plan\u2019s commercial limits had not been adjusted in more than two decades to keep pace with increasing property values and coverage needs.<\/p>\n \u201cGiving businesses greater options for insurance coverage is a top priority of mine. I am pleased the FAIR Plan is stepping up when insurance companies fall short in providing businesses and homeowners access to the coverage they need,\u201d said Commissioner Lara. \u201cI will continue working to expand coverage options and drive down the costs of insurance through wildfire safety discounts and increasing competition in the market.\u201d<\/p>\n Today\u2019s agreement signed by Commissioner Lara and FAIR Plan President Victoria Roach will increase the combined coverage limits for the FAIR Plan, under its Division I Commercial Property Program, from $8.4 million to $20 million per location and, under its Division II Businessowners Program, from $7.2 million to $20 million per location.<\/p>\n \u201cThe FAIR Plan is committed to strengthening consumer choice in the voluntary insurance market and ensuring all Californians have access to basic property coverage,\u201d said Roach. \u201cWe appreciate Commissioner Lara\u2019s leadership to take this step forward to address the challenges in the current commercial coverage market, while attempting to balance those challenges with the need for stability in the insurance market. We welcome the opportunity to continue collaborating with the Department of Insurance, the Legislature and other stakeholders to restore a viable insurance market for all Californians regardless of where they reside.\u201d<\/p>\n State legislators joined Commissioner Lara\u2019s call for an increased commercial coverage limit at the FAIR Plan in letters sent earlier this year.<\/p>\n \u201cI applaud Insurance Commissioner Lara and the California FAIR Plan for working together to increase access to coverage for homeowners in high fire risk areas,\u201d said Senate President pro Tempore Toni G. Atkins (D-San Diego). \u201cLonger, more devastating fire seasons mean that Californians are feeling the impacts of climate change now. Expanding coverage is an important step towards preventing further displacement and protecting homeowners throughout the state. I look forward to continued conversations on how to make insurance more accessible for residents in high fire risk areas.\u201d<\/p>\n \u201cConsumers at risk of losing their homes need immediate relief. They cannot wait for long-term solutions to current insurance market challenges, in particular the impacts of climate change,\u201d said Senator Susan Rubio (D-Baldwin Park). \u201cAt this moment, inaction is not an option. I commend Commissioner Lara for taking decisive action to protect consumers who are most at risk of losing protection. As Chair of the Senate Insurance Committee, I look forward to our continued collaboration and discussions with all stakeholders to identify viable long-term solutions for a healthy and stable insurance market.\u201d<\/p>\n “This action to increase the California Fair Plan’s\u00a0commercial coverage limit will improve access to fire insurance\u00a0coverage for our businesses as well as multi-residential properties across our high fire risk areas,\u201d said\u00a0Senator Marie Alvarado-Gil (D-Jackson).\u00a0\u201cMy constituents\u00a0are directly impacted by the lack of available fire insurance coverage and I applaud the Insurance Commissioner and California Fair Plan leadership for working together to implement this necessary\u00a0increase in the coverage limit. As a member of the Senate Committee in Insurance, I look forward to continuing to work with Commissioner Lara and my colleagues to deliver solutions to the fire insurance crisis impacting so many across Senate District 4 and our entire state.”<\/p>\n The new coverage limits will take effect after the FAIR Plan submits a new rule filing for approval by the Department of Insurance. The FAIR Plan has 60 days to submit a rule filing to the Department, with the goal of the Department approving these coverage limit increases, meaning coverage could be available in the fourth quarter.<\/p>\n Business groups welcomed the additional coverage.<\/p>\n \u201cThis is a step forward in helping community associations find available, reliable, and affordable insurance coverage,\u201d said Kieran Purcell, Chair of the Community Associations Institute California Legislative Action Committee. \u201cWe support Commissioner Lara\u2019s continued efforts to promote wildfire safety measures while aggressively pushing insurance companies to write the coverage that our communities need.\u201d<\/p>\n \u201cThe increase in commercial coverage amounts provided by the FAIR Plan offers a much needed reprieve for the summer camps of California.\u00a0Summer camps provide valuable opportunities for California\u2019s youth but, in recent years, challenges to camps have been exacerbated by increasing costs for insurance coverage, and too often the coverage that was available came at too high a cost for these small businesses to afford,\u201d said Mike Stillson, Chair of the California Collaboration for Youth.\u00a0\u201cThis action by Commissioner Lara will provide the opportunity to properly insure our camps, buildings, and property moving forward, insuring our infrastructure in order to provide services to the youth of California. The California Collaboration for Youth thanks Commissioner Lara for once again working to help summer camps provide unforgettable experiences for the children of California.\u201d<\/p>\n \u201cCalifornia\u2019s diverse farms need more than a one-size-fits-all solution for insurance,\u201d said California Farm Bureau President Jamie Johansson.\u00a0\u201cIncreased FAIR Plan coverage limits give farm families greater options and security to plan for the future. We thank Commissioner Lara for continuing to support our agricultural community.\u201d<\/p>\n Since taking office, Commissioner Lara has prioritized increasing access to affordable insurance for California consumers and businesses. In October 2022, Commissioner Lara enforced the nation\u2019s first Safer from Wildfires regulation requiring wildfire safety discounts<\/a> for homes and businesses. In November 2021<\/a>, Commissioner Lara ordered the FAIR Plan to increase its combined commercial coverage limits for the first time and, in November 2019<\/a>, he ordered the FAIR Plan to increase its personal dwelling coverage limit to $3 million, doubling it from where it had been for two decades.<\/p>\n <\/p>\n Media Notes:<\/strong><\/p>\n Under the agreement, the FAIR Plan will increase liability protection up to $3 million.<\/p>\n <\/p>\n About the California FAIR Plan<\/strong><\/p>\n The California Fair Access to Insurance Requirements (FAIR) Plan is an insurance pool established by law to assure the availability of basic property insurance to people who own insurable property in the State of California and who, beyond their control, have been unable to obtain insurance in the voluntary insurance market. The FAIR Plan provides stability in California\u2019s insurance marketplace. It is committed to strengthening consumer choices in the voluntary insurance market, while ensuring that all homeowners, including those who live in areas threatened by wildfires, have access to basic property coverage and the peace of mind they deserve. For more information, visit\u00a0www.CFPnet.com<\/a>.<\/p>\n