California Department of Insurance's financial reports

California Extends FAIR Plan Amid Wildfire Insurance Lawsuit, $600 Billion in Liabilities

Jul 26, 2024, 06:11 PM

Hundreds of thousands of Californians in wildfire-prone areas have been sold insurance policies by a state-regulated company that allegedly fail to protect them from all the damage that fires can cause, according to a lawsuit filed Tuesday, July 24. In response to the increasing wildfire risk, California plans to extend its last-resort insurance program, the FAIR Plan, to cover higher-value properties and condo owners. The state’s insurance policyholders could face higher charges if another year of massive wildfires depletes the FAIR Plan’s funds. Under a new agreement, insurance companies and policyholders would share the costs if the FAIR Plan runs out of money. California currently faces $600 billion in unfunded liabilities and a deficit of up to $70 billion, with $340 billion in new liabilities due to fires.