The CA FAIR Plan, have you heard of it? If you live in a “high risk” area in California, you will probably start to hear about it from your neighbors and your insurance broker. It’s available to you if you’ve had your homeowners insurance non-renewed, or have been denied coverage due to your address or zip code. But what is the CA FAIR Plan?
The California Fair Access to Insurance Requirements (FAIR) Plan was created in 1968. It is a basic property insurance policy offered to California property owners, when they cannot obtain coverage otherwise. The FAIR Plan is not publicly funded and it is not a state agency. All insurance companies that are licensed to do business in California contribute to the Plan, as per the Insurance Code Statute. The FAIR Plan is financially backed by all of the insurance companies that contribute to the Plan. The FAIR Plan offers policies for homeowners, manufactured homeowners, renters, condo unit owners, & business owners policies. The FAIR Plan participates with the CEA, California Earthquake Authority. So, if you have a FAIR Plan policy, you may also purchase a CEA earthquake policy.
You should know that the FAIR Plan homeowners policy is not like a standard home insurance policy. It is limited in what it offers to cover for your property. It will cover fire and lightening; but if you want coverage for windstorm, hail, or vandalism, you must add those options to the policy. Did you notice I haven’t mentioned coverage for theft, liability, or water damage? Those are not offered at all on the FAIR Plan policy. If you want those coverages, you’ll need to purchase a second policy.
The second policy you’ll want to consider is called a Difference in Conditions (DIC) policy. Sometimes referred to as a “Wrap Policy” or a “Limited Property Policy” or a “Companion Policy”. This policy won’t cover anything that is offered to be covered on the FAIR Plan. Instead, it helps to fill in some of the gaps in coverage, by offering coverage for theft, liability, and when applicable, water damage. The FAIR Plan does not offer the DIC policy, it must be obtained by a different insurance company offering that policy.
For many years, Rancho Cal Insurance Services has been able to assist our clients in obtaining a policy with the CA FAIR Plan, as well as a DIC (Difference in Conditions) policy. If your having trouble obtaining a home insurance policy, or if you’ve been non-renewed by your insurance company because of your location, give us a call. We can help you too.