SACRAMENTO, CA – Today, Stronger California, a coalition committed to ensuring that homeowners, communities, and businesses are protected with improved vegetation management, land practices and the availability of affordable insurance, provided the following statement ahead of the Department of Insurance’s investigatory hearing on the California FAIR Plan:
“While the FAIR Plan serves as a temporary safety net and offers a basic level of protection, it was never intended to provide comprehensive coverage, and therefore it is not currently equipped with the expertise or resources needed to negotiate rates, determine pricing, and process claims for all types of coverage.
“This approach could lead us down a risky path resulting in insurers subsidizing a FAIR Plan with rates that are artificially subsidized, causing a serious market imbalance. We already learned this lesson in Florida when the industry-funded Citizen Plan offered rates 25 percent lower than the market rate, resulting in insurers fleeing the state and homeowners coverage being put in jeopardy.
Expanding the FAIR Plan’s mandate would ultimately reduce availability of coverage in the private market and hurt affordability, leaving California property owners without the security and protections necessary to face the increasingly dangerous wildfire season. The Insurance Commissioner’s Wildfire Framework and similar policy changes that reduce wildfire risk, increase consumer choice, and expand insurance availability offer longer term solutions that serve homeowners in the face of climate change.”