California Insurance Commissioner Harry W. Low issued an order expanding the geographic areas eligible for coverage through California’s Fair Access to Insurance Requirements (FAIR) Plan. The Order expands the FAIR Plan to real or personal property located at a specific address in instances where the person with an insurable interest in the property has, despite a diligent effort, been unable to obtain insurance in the admitted or surplus lines market.
According to the California Department of Insurance, evidence of a “diligent effort” must be satisfied through certain criteria detailed in the Order and the property must meet reasonable underwriting standards also referenced in the Order. The FAIR Plan was established in 1968 after brush fires and riots of the 1960’s created a difficult insurance market.
The FAIR Plan writes basic property insurance to those areas that are not serviced by the admitted and surplus lines market, and is, in essence, the insurer of last resort. Pursuant to Insurance Code Section 10091(c), the Commissioner regulates the FAIR Plan and has the authority to designate the geographic or urban areas eligible for FAIR Plan coverage.
In 1999, FAIR Plan designated areas were restricted primarily to urban and certain brush hazard regions in Southern California. However, consumer experience has since illustrated the need for re-evaluation and expansion of FAIR Plan availability. Consumers should contact their agents to determine whether they are eligible for the California FAIR Plan.
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