February 7, 2025
The California FAIR Plan – an independent, not-for-profit catastrophe insurer of last resort – continues to receive, manage and pay claims related to the Southern California wildfires. We remain focused on helping customers and ensuring all covered claims are paid as soon as possible.
Managing Covered Claims
As of February 4, the FAIR Plan has received approximately 3,485 claims for damage caused by the Palisades Fire and approximately 1,314 claims for damage caused by the Eaton Fire. The claims vary according to the type and amount of coverage and loss. New claims, including total loss claims, continue to be reported daily.
The FAIR Plan has paid more than $700 million to policyholders, including advance payments, to cover claims related to the Palisades and Eaton fires.
Approximately 45% of the wildfire claims are reported as total losses, 45% reported as partial losses, and 10% as Fair Rental Value only, which covers lost rental income due to a covered peril, like fire. It is important to note these approximations may shift as new claims are submitted and confirmed, including claims made before policyholders were able to return to their properties and determine the extent of damage.
All Covered Claims Will be Paid
The FAIR Plan is responsibly prioritizing claim payments, and we continually monitor our financial position, which evolves daily, to ensure that all covered claims can be paid promptly.
Reinsurance
The FAIR Plan is accessing reinsurance, a payment mechanism to help pay claims.
The FAIR Plan can access the first $350 million in available reinsurance for anticipated claims payments and related expenses above the $900 million deductible. The FAIR Plan can access additional layers of reinsurance based on losses incurred and outstanding reserves up to a $5.78 billion limit, which includes varying percentages of co-reinsurance, similar to co-pays, subject to certain conditions. To access all layers of available reinsurance, the FAIR Plan is responsible for paying up to approximately $3.5 billion, including the $900 million deductible, and copays.
Assessment
The FAIR Plan has not yet asked the California Insurance Commissioner for an assessment in response to the Southern California fires. By statute, the FAIR Plan, with the approval of the
California Insurance Commissioner, has the right to assess all admitted insurers licensed to sell and selling property insurance in California to help pay for FAIR Plan losses.
The FAIR Plan does not have a role in determining how insurers manage costs associated with an assessment.
LA Wildfire Exposure
The latest estimates approximate the FAIR Plan has a total potential exposure of over $4 billion for the Palisades Fire and $775 million for the Eaton Fire, according to the CAL FIRE incident maps.
It is important to note that “exposure” does not equal “loss.” Exposure means the total amount of insurance for a particular property or group of properties. It does not equate to the number of claims made or the anticipated claims and expense payments related to those claims.
Submitting a Claim
We encourage affected customers to submit a claim anytime on our website at www.CFPnet.com If customers have questions and/or difficulty submitting a claim online, they can call 800-339-4099. Customers can also work with their broker to submit a claim on their behalf.
More information about submitting a claim and what to expect after doing so is available at https://www.cfpnet.com/claims/.
Additional information about submitting claims, including responses to frequently asked claims questions, and key statistics and data is available at www.cfpnet.com.
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About the FAIR Plan
The FAIR Plan is a private association comprised of all insurers licensed to write property insurance in California and is funded primarily through the policies it sells to customers. The FAIR Plan is not a state agency and is not funded by the state or other public agencies.
The FAIR Plan offers basic property insurance for all Californians who cannot access coverage in the voluntary insurance marketplace. As an insurer of “last resort,” the FAIR Plan was established by statute to provide a temporary safety net for consumers who need fire insurance until coverage through the voluntary market is available. For more information, visit www.CFPnet.com.
For media questions, contact:
media@cfpnet.com
The above information can be attributed to the California FAIR Plan.