California FAIR Plan homeowners insurance

Overview

The California FAIR Plan is the state's insurer of last resort for property. It sells basic fire insurance to owners whose homes the traditional market will not cover, which in practice now means mostly homes in wildfire country. It is not a state agency and receives no public money. By law, every insurer licensed to write basic property insurance in California is a member, the FAIR Plan issues policies on their behalf, and each member shares in its profits, losses and expenses in proportion to its share of the state market.

The plan has grown fast as private insurers pulled back. It had 696,562 dwelling and commercial policies in force and $768 billion of exposure in June 2026, up 157% and 250% since September 2022, with $2.04 billion of written premium. It writes a dwelling fire form rather than a homeowners package, so it is absent from the NAIC homeowners market share rankings even though, by its own account, it now ranks among the state's largest residential property insurers.

You cannot buy from the FAIR Plan directly. Policies are sold through licensed brokers and agents registered with the plan.

History

The Legislature created the California FAIR Plan Association in August 1968 as an insurance placement facility under Insurance Code sections 10090 and following, part of a national wave of FAIR (Fair Access to Insurance Requirements) plans. For decades it was small: The California Department of Insurance (CDI) says it had more than 140,000 policies in 2015 and covered under 3% of residents in 2020.

Since Commissioner Ricardo Lara took office in 2019, the plan has been reshaped by order and statute. In 2019 CDI ordered it to double its residential limit to $3 million. A July 2024 agreement under the Sustainable Insurance Strategy added a high-value commercial option and set how future deficits are shared. After the January 2025 Eaton and Palisades fires, the commissioner approved a $1 billion assessment on member insurers on February 11, 2025, the first in more than 30 years. AB 226, the FAIR Plan Stability Act, signed in October 2025, lets the plan issue catastrophe bonds and borrow with the commissioner's approval. AB 1680, the Make It FAIR Act, followed a CDI examination that found the plan had not complied with 17 critical recommendations; CDI's September 30, 2026 release lists it among bills the governor signed in 2026. CDI says a more comprehensive residential option, covering water damage, liability, theft and additional living expenses without a separate policy, is in progress but not yet available.

Homeowners coverage

The residential product is a named-peril dwelling fire policy (form CFP 00 01). The base policy covers only fire and lightning, internal explosion and smoke. The current form defines smoke to include airborne or wind-driven soot, ash and char, but excludes smoke from fireplaces, barbecues, fire pits and agricultural or industrial sources. For an added premium you can buy extended coverages (windstorm or hail, explosion, riot, aircraft, vehicles and volcanic eruption), vandalism and malicious mischief, ordinance or law, extra debris removal and coverage for plants, shrubs and trees.

Loss settlement defaults to actual cash value. A total loss pays actual cash value measured by the property's fair market value, up to the limit, and partial losses are paid less depreciation. Replacement cost on the dwelling and on personal property are optional add-ons, so check the declarations page for a checkmark next to each. Coverage D (fair rental value) pays the rental value of the part of the home you can't use; the base form lets you apply up to 10% of the dwelling limit to it.

The limit is $3 million per residential location. The FAIR Plan does not estimate your rebuilding cost; you and your broker set the limit.

What it leaves out, and what to pair with it

A FAIR Plan policy does not cover liability, theft, or water damage from burst pipes or appliances, the coverages most homeowners assume they have. The standard answer is a difference in conditions (DIC) policy from a private insurer, sold through your broker and designed to sit beside the FAIR Plan policy and fill those gaps. The FAIR Plan does not sell DIC policies; CDI keeps a list of companies that do. Flood and earthquake require separate policies; the FAIR Plan offers earthquake coverage through the California Earthquake Authority.

Eligibility and how to apply

The FAIR Plan is for owners who cannot get coverage in the traditional market. A broker must first make a diligent search for comprehensive coverage; if a regular insurer will write the home, the FAIR Plan is not the right choice. Brokers do not charge extra, and you can use more than one. Monthly payment plans are available without a fee.

How to leave

The plan describes itself as a temporary safety net. Ask your broker to shop the traditional market before each renewal. Through the FAIR Plan clearinghouse, participating insurers may review your policy information and offer to move you to the standard market (you can opt out of the sharing). Under the Sustainable Insurance Strategy, insurers using new rate rules have committed to write in distressed areas, including FAIR Plan policies. Keep the FAIR Plan in force until a new policy is bound.

Discounts and savings

Since November 15, 2025, dwelling policyholders can earn up to 12 wildfire-hardening discounts on the wildfire portion of the premium, worth up to 16.4% in total. They cover the immediate surroundings (clearing within 5 feet of the house and under decks, noncombustible fences near the home, distant sheds, compliance with defensible-space law), the structure (Class A roof, enclosed eaves, ember-resistant vents, multi-pane windows or shutters, 6 inches of noncombustible material at the base of walls), community programs (Firewise USA or a Board of Forestry Fire Risk Reduction Community) and a completion credit. See home hardening for wildfire and insurance discounts.

Where it sells and recent market moves

The FAIR Plan writes only in California, statewide. Growth has slowed: CDI said it added about 16,000 residential policies in the first quarter of 2026, down from 35,000 to 50,000 a quarter from 2024 through September 2025. Prices are rising. The plan asked for a 35.8% average dwelling rate increase in 2025 and won approval for 29.1%, effective for new and renewal business on October 15, 2026, with the largest increases in high wildfire-risk areas and decreases for some policyholders.

Claims

Report a claim online at any hour through the FAIR Plan's claim portal (you need your policy number and mailing ZIP code), by phone at 800-339-4099 or 213-487-0111 during business hours (weekdays 8:30 a.m. to 4 p.m.), or through your broker. Photograph damage and make only repairs needed to prevent further loss until an adjuster inspects. After the 2025 Los Angeles fires the plan handled about 5,400 Eaton and Palisades claims and paid nearly $3.5 billion, it said in January 2026. CDI has taken formal legal action against it over what the department calls illegal denials of hundreds of smoke damage claims, a case set for hearings before an administrative law judge in 2026.

Ratings and reputation

The FAIR Plan carries no financial strength rating. It pays claims from premiums, reinsurance, a $750 million catastrophe bond, a line of credit and, when those run short, assessments on member insurers. Under CDI's rules, members may ask to recoup 50% of an assessment of up to $1 billion, and all of any amount above that, from their own policyholders through a temporary fee approved in advance. State Farm, for example, set a fee of 1.13% of homeowners premium for two renewals starting December 1, 2025 to recover part of its share. So a FAIR Plan deficit can reach the bills of Californians who never bought a FAIR Plan policy.

Who it suits

The FAIR Plan fits a California owner who has been turned down by the traditional market, typically because of wildfire exposure, and who needs fire coverage to keep a mortgage or protect equity. Paired with a DIC policy, it can approximate a homeowners policy, though at two premiums.

• Strengths: available when private insurers decline; $3 million residential limit; wildfire-hardening discounts of up to 16.4% of the wildfire premium; monthly payments without a fee.
• Weaknesses: named-peril fire policy with no liability, theft or water damage; actual cash value unless you buy replacement cost; 29.1% average rate increase from October 15, 2026; CDI legal action over smoke claims.

How to contact California FAIR Plan