California Insurance Commissioner Ricardo Lara and the California FAIR Plan Association agreed to more than double its existing commercial coverage limits to $20 million for businesses unable to find coverage in the normal insurance marketplace.
Lara and the FAIR Plan have been working on this issue since the commissioner’s investigatory hearing into the FAIR Plan.
The agreement signed by 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.
The new coverage limits will take effect after the FAIR Plan submits a new rule filing for approval by the California Department of Insurance. The FAIR Plan has 60 days to submit a rule filing to the department, with the goal of the CDI approving the limit increases, meaning coverage could be available in the fourth quarter.
Under the agreement, the FAIR Plan will increase liability protection up to $3 million.
The FAIR Plan is an association comprised of all insurers authorized to transact basic property insurance in California, and it is designed to be the state’s property “insurer of last resort,” writing coverage for businesses and residences when other insurance options are not available.
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