The California FAIR Plan, the state’s insurer of last resort, will increase its coverage limits, which have not been increased in more than 24 years, to keep up with inflation. Currently Earlier, Gov. Gavin Newsom signed a law allowing the FAIR Plan to insure farm structures.
The FAIR Plan’s maximum policy limit for its commercial property program is currently $4.5 million, and that policy limit has not been increased since at least 1997. The FAIR Plan maximum policy limit for its Businessowner’s Policy program is currently $3.6 million, and that policy limit has not been increased since at least 1994. The Consumer Price Index shows that costs have nearly doubled during that time in California.
“While wildfires can happen in many agricultural regions of the state, some parts of our state have borne the brunt of devastating fires starting in 2017,” said Insurance Commissioner Ricardo Lara. “With a tighter insurance market due to wildfire risks, many farmers and vintners need more coverage than they can currently get. I am taking aggressive action to protect our farmers, vintners, and other businesses immediately while local government, state government, insurers and businesses all work together to reduce the wildfire risk and increase a competitive insurance market.”