California fair plan; Last resort for Home Insurance

What is the California FAIR Plan and why do they always capitalize the FAIR? After doing some research I have the answers to your most requested questions. Actually, no one has been asking any questions about the FAIR plan so I made up my own. And then I answered them. Enjoy!
First off, What is the California FAIR plan? The FAIR plan was established in 1968 after several large brush fires and riots that hit the state. There was a need to help people who couldn't get insurance after these events. The state enacted a law to establish the plan. Surprisingly it is not funded at all by tax payers.  The FAIR plan is described best as an "insurance placement facility".  That means it doesn't hold onto the business itself. It works with all the companies that write insurance in California. It places the policies with these existing companies and pays out profits to the companies that carry the most policies. All the losses covered on the policies are then supported by existing home insurance companies.
Why is it called the FAIR Plan? FAIR is actually an acronym for Fair Access to Insurance Requirements.  Basically, someone probably thought it was good to call it fair and they worked backwards to put words to each letter. You know what I'm saying? 
The FAIR plan has worked nicely for the last 50 years. It filled a large void in the insurance industry. If there were homes with numerous claims or homes that were in areas that insurance companies would not cover they provided a product option. So, why are they talking about making changes to the policy? After the fires in 2018 the landscape dramatically changed. Just as in 1968 when the plan was brought into existence California saw a huge change from the private insurance industry.  Homes that in a prior years would have dozens of companies competing now had none. Insurance companies that were willing to take on medium to high risk were now only looking for low risk properties.
What are the proposed changes for 2020? Starting next month the FAIR plan will start taking credit cards. This is a huge change because the down payments can be very large for the FAIR plan. And in order to bind the coverage they require a payment. You aren't able to bill a mortgage company to start the policy. Higher dwelling coverage. The FAIR plan is proposing increasing the dwelling limit from 1.5 million to 3 million. That may not seem like a big deal but the policy doesn't offer any extended limits for insurance. So, bigger custom homes would not always be able to have enough coverage to replace their homes if something were to happen. The last big proposed change that may happen this summer is adding additional coverage options to the policy. Currently, the policy doesn't offer any liability coverage and they don't cover any water or theft coverage. With those two additions the policy would work more like a standard HO3 policy you can buy from other carriers.
So, that's the quick 411 on the California FAIR plan. If you need to get a quote give us a call at 951-395-0754