Glossary

Assessment

An extra charge raised after a state-backed insurer or guaranty fund runs short of money, collected from insurers and sometimes passed on to policyholders.

Also called: insurer assessment, emergency assessment, plan assessment, policyholder surcharge

In this sense, an assessment is how a state-backed insurer or a guaranty fund covers a shortfall. When claims from a catastrophe or an insolvency exceed what the plan holds in reserves, reinsurance and bonds, the law lets it charge the difference to others. Do not confuse it with the special assessment an HOA levies on owners, which is what loss assessment coverage coverage addresses.

The mechanics depend on the state. In a FAIR plan, the plan assesses member insurers in proportion to their market share. In February 2025, California's Insurance Commissioner approved a $1 billion assessment on insurers to help pay Los Angeles wildfire claims, and a separate process lets insurers ask to recoup up to half from their own policyholders. Florida uses tiers. A policyholder surcharge of up to 15% of premium applies first, only to Citizens customers. A further emergency assessment of up to 10% of premium per year can reach policyholders of private insurers too, according to Citizens' notice of changes effective January 1, 2024. Check current law, since these rules change.

For a homeowner, an assessment shows up as a line item on a bill, and it is not negotiable. If you hold or are offered a plan policy, ask your agent whether assessment exposure applies. See FAIR plans explained: the insurer of last resort for homes and how guaranty funds are financed.

Last reviewed October 10, 2026

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Related terms

FAIR plan A state pool, funded by the insurers doing business there, that sells basic property coverage to owners who cannot find it in the regular market. Residual market The state-created plans and pools that cover property owners the private market declines, as opposed to coverage insurers sell by choice. Guaranty fund A state safety net, financed by charges on licensed insurers, that pays covered claims up to a cap when an insurer is declared insolvent. Insurer of last resort A state-created or state-sponsored insurer that sells coverage to property owners who cannot get a policy from a private company. Loss assessment coverage Coverage for your share of a bill that a condo or homeowners association charges owners after a covered loss that its own insurance does not fully pay. Depopulation A state program that moves policies out of a state-backed insurer and into private companies, shrinking the plan's exposure to the next catastrophe.

Related guides

The California Earthquake Authority explained What the CEA is, how its policies are sold through your home insurer, what they cover and exclude, how it is funded, and what its limits mean for homeowners. The California FAIR Plan explained What the California FAIR Plan covers and leaves out, how to pair it with a DIC policy, how it is funded, and how to move back to a regular insurer. Citizens Property Insurance in Florida: who qualifies and what to know How Florida's Citizens works: the 20% eligibility rule, what it covers, take-out offers, flood and assessment rules, and how to move to a private insurer. Beach and windstorm pools along the coast: how they work Wind pools in Texas, Alabama, Mississippi and the Carolinas cover coastal wind and hail when private insurers will not. Eligibility, limits and tradeoffs. FAIR plans explained: the insurer of last resort for homes How FAIR plans and coastal wind pools work, who qualifies, what they cover and leave out, how they are funded, and what to ask before relying on one. Installment fees, policy fees and surcharges on a homeowners policy Which charges beyond the base premium you can avoid, such as installment and card fees, and which you cannot, such as state-mandated surcharges and assessments.

Related insurers

California FAIR Plan California's insurer of last resort, a pool of all licensed property insurers selling basic fire policies; 696,562 policies in force in June 2026. Citizens Property Insurance Corporation (Florida) Florida's not-for-profit, government-created insurer of last resort; takeouts cut it from 1.41 million policies in 2023 to about 255,000 in October 2026. Louisiana Citizens Property Insurance Corporation Louisiana's nonprofit insurer of last resort, created in 2003 to run the state's FAIR and Coastal plans, with rates set by law above the private market's. NC Insurance Underwriting Association (Coastal Property Insurance Pool) North Carolina's market of last resort for the Outer Banks and 18 coastal counties, writing homeowners, dwelling and wind-only policies up to $1 million. Texas FAIR Plan and Texas Windstorm Insurance Association Texas' insurers of last resort: the FAIR Plan sells basic homeowners coverage statewide, and TWIA sells wind and hail coverage on the coast.