State Highlight: California FAIR Plan –  Insurer of Last Resort

The California Fair Access to Insurance Requirements (FAIR) Plan was established in 1968 by the Governor and legislature to ensure that all homeowners can obtain basic home insurance coverage, regardless of their risk level. This plan became the state’s insurer of last resort for homeowners unable to obtain it from a traditional insurance carrier due to high wildfire risk. California’s FAIR Plan offers basic coverage through a shared market where licensed insurance companies agree to share the risk of California homeowners who do not qualify for voluntary coverage.

Policy Options

• California A.B. 1054 (enacted 2019): Takes steps to enforce utility safety standards, and assess when and how costs arising from utility-caused wildfires can be passed on to ratepayers. It also provides tools for utilities to manage liabilities, including options for debt management and a more substantial catastrophic wildfire fund.
   
• Hawaii S.R. 79 (enacted 2024): Resolution requesting the Insurance Commissioner to research and initiate discussions with stakeholders about establishing a Wildfire Insurance Compact to address the increasing wildfire risks exacerbated by climate change
  
• Oregon S.B.82 (enacted 2023): Mandated that insurers provide detailed notices to policyholders if a homeowner insurance policy is canceled, not renewed, or if premiums are increased due to wildfire risk. Prohibited the use of state-published wildfire risk maps as a basis for canceling, non-renewing, or increasing premiums on homeowner insurance policies.