California Fairplan is a last resort insurance program for homeowners who are unable to obtain fire coverage in the private insurance market. Contrary to popular belief, CA Fairplan is not a government-supported program. It is financially supported by private California home insurance companies, not taxpayers. Recent disruptions in the California home insurance market have put a strain on fair plans, strained, and become increasingly expensive. As of March 2025, over 555,000 housing policies were in effect for California Fair Plans, an increase of 23% since September 2024. But for Californians who have homes in high-risk wildfire areas, that may be the only way to protect their homes financially.
Bankrate’s team of insurance experts is here to explain how they need to know Californians considering a fair plan.
The event could result in a wildfire in Los Angeles in January 2025. Fire insurance losses are estimated at around $40 billion, but they can be much higher. One of the major flames, the Palisades fire, wreaked havoc in the Pacific Ocean, a coastal community in western Los Angeles. The fair plan covered about 22% of structures destroyed by the Pallisard fire, as well as 12% of structures destroyed by the other major flame, the Eaton fire. In total, the Fair Plan is considering a potential exposure of $4.777 billion. As of May 2025, Fairplan had paid more than $2.9 billion claims resulting from the January wildfire, and had a $500 million valuation of the private insurance company supporting it. It spreads across the state, and ratings are around $60 per household. The fair plan required an assessment early in the year, so it could potentially allow California homeowners to see another homeowner at some point this year.
California Fair Plan Insurance explained
Fair Access, or Fair Planning to California Insurance Requirements, was established in 1968, providing insurance coverage to high-risk area homeowners along wildfire zones and earthquake disaster lines. Fair plans are provided through a shared marketplace where licensed insurers are responsible for risks for California homeowners who do not qualify for voluntary coverage.
California Fairplan Insurance is limited more than standard homeowner insurance. However, a fair planning policy can be financially protected from homeowners being responsible for all out-of-pocket expenses. A fair plan typically offers fewer types of losses and fewer policy options than private home insurance plans, but you can add more coverage at an additional cost. Importantly, earthquake compensation is not included and must be added as approval from the California Earthquake Agency.
California’s fair plan is a last resort and is intended to be a temporary solution for homeowners who need hazard insurance in California. The Fairplan Association recommends that California homeowners apply for private homeowners insurance several times before applying for fair plan coverage. Additionally, homeowners must meet certain other requirements to qualify for a fair plan.
How will California’s sustainable insurance strategy affect fairness planning?
With multiple insurers limiting or completely suspending new home insurance policies in California, the market is caring towards chaos. Starting in late 2022, seven of California’s 12 largest home insurance companies have market shares, with seven market shares imposing massive restrictions on writing new policies in the state. With coverage availability reduced, many homeowners across California had no choice but to rely on fair planning policies.
In March 2024, State Farm, California’s largest home insurance company, broke news that it would hide roughly 70,000 policies due to market share, of which 30,000 are estimated to belong to homeowners. Many of these non-update policies are expected to move to fair plans and put the plans at risk of bankruptcy. Bankruptcy with a fair plan can affect homeowners, not plans. Remember: Fairplans are supported by private insurance companies in California. If a plan’s homeowner suffers widespread losses, as well as those that occurred after the wildfire, homeowners with private policies may see a sharp premium increase to cover the losses of these fair plans.
In late 2023, California Insurance Commissioner Ricardola announced a sustainable insurance strategy, a multifaceted approach to bring stability to the home insurance market and encouraging private providers to return to the state. One of the targets appointed in Lara’s plan is to place a burden on fair plans by seeking private insurers’ commitment to writing 85% of new businesses in historically underserved areas, and modernizing the current fair plans to include homeowners associations and affordable housing projects. However, part of the strategy is also to call homeowners to plan fairly. and State insurance companies are not just insurers, but also when plans need to call cash after a catastrophic home loss. In February 2025, the Fair Plan had a $1 billion valuation that would help recoup the losses from the January 2025 wildfires.
The loss of insured (from wildfires starting in January 2025) is expected to run for billions of dollars given the high value of homes and businesses in the affected areas. The losses are shared between standard homeowner insurance companies, insurers specializing in high-value excess and surplus homeowners policies, and California fair plans. Additionally, losses on commercial property can be significant.
– Jason Cooper
Moody’s Vice President of Evaluation Credit Manager
What California Fair Plan Insurance covers
California’s fair plan policy covers much less cover than traditional HO-3s. Standard CA Fairplan Policy provides financial protection to your home and personal property only if it is damaged from one of four name hazards: fire, lightning, internal explosions and smoke. Liability compensation is not available in California fair plans, and standard plans are guaranteed only at actual cash value. To compare, HO-3’s policy includes liability compensation, covering your residence and other structures with open parils and providing financial protection for your personal property from the dangers of 16 different names.
Fairly planned home insurance can be changed with these approvals, but doing so increases the cost of coverage.
- Other structural coverage: Coverage of other structures protects against covered damage to peeled structures such as garages, porches, sheds, and fences.
- Fair rental value compensation: Available on rental properties, this approval covers lost revenue if the unit is rendered unfreely due to damage from covered danger.
- Residential replacement cost range: This approval covers residences at replacement cost value (RCV) relative to actual cash value (ACV).
- Personal property exchange costs range: You will be guaranteed by the RCV. The RCV replaces items with the current exchange value without considering depreciation.
- Ordinance/Law Report: After the covered loss, this approval is paid to make a structural upgrade to the home and meets the home’s building standards.
- Vandalism and malicious pranks: Add financial protection if the physical structure of your home and your personal belongings are damaged due to vandalism, malicious pranks, or both.
- Debris Removal Coverage: After the storm, pay to clean up debris on the property.
- Inflation Guard Protection: This approval automatically raises compensation limits based on inflation without paying out of pocket for more coverage.
- Plants, shrubs, and trees coverage: The approval includes coverage up to $250 for landscaping losses.
- Outdoor radio and television equipment, sunshade and sign coverage: This approval covers outdoor gear, signs and shades from covered hazards, except for wind and hail storms.
- Improvements, changes and additional coverage: This coverage is available to condo owners and covers damage to improvements or changes to the unit.
Earthquake insurance is not available through fair planning. Instead, you can purchase another earthquake insurance through the California Earthquake Agency (CEA).
What is the difference between California’s Terms (DIC) policies?
Approval of fair plan purchase home insurance may provide broader financial protection, but it is still not the same as private insurance. Fairplan homeowners who cannot obtain policies in the private market but want to be able to purchase the different terms (DIC) policy, the type of financial protection offered by HO-3. This is a supplementary form of insurance to fill in the coverage left by a fair planning policy. This includes coverage for a wide range of risks, such as theft, and can provide liability insurance. DIC policies usually also provide compensation for landslides, mudflows, earthquakes and floods. Not all California insurers offer this type of coverage, but the California Department of Insurance maintains a list of providers that provide it.
Who is qualified for California’s fair planning?
California’s Fair Plan provides property insurance for owner and tenant occupying buildings, seasonal homes, condominiums and rental properties (personal property only). To obtain compensation, the property owner must meet certain criteria. Applicants for fair plans must own a single-family home, townhome, or condominium, or own a rental unit in California, and the home must meet the requirements of the specific building.
Some homeowners do not meet fair planning standards, even if they are considered high risk. This fair plan does not cover 50% of vacant homes per year, existing damages that have not been repaired, and homes tied to illegal activities under state and federal laws.
Most importantly, homeowners looking to reach California fair plans must demonstrate that they have been denied multiple coverages from the private insurance market. The Fair Plan is designed as a last resort insurance company, and the policy is generally reserved for the state’s most risky homes.
California’s fair planning insurance costs
Like standard home insurance, California fairplan premiums vary based on many rating factors. This includes the location of the home, age, condition, proximity to the fire department, history of the homeowner’s claims, the type and amount of compensation, and the amount of deductions selected. In a 2022 interview with KCRA, a Fairplan spokesman said the average cost of an insurance policy is around $3,200 a year, which is much higher than typical California home insurance. few. If you purchase a policy to complement your fair plan, such as conditions, flooding, and earthquake policy differences, the cost of ensuring your home can be even more expensive.
How to get a fair plan for California
The process of purchasing a California fair plan is very simple. However, this process is slightly different from getting traditional home insurance. Here’s a quick overview of how to get a California fair plan.
- Find a provider: California Fairplan Insurance can be purchased through a state-sanctioned insurance broker. Homeowners can use the online broker search tool on the Fairplan website to find local agents within or near the postal code. Brokers do not collect fees when selling fair planning insurance policies, similar to standard home policies.
- Please check if you are eligible. Not all homeowners are eligible for a California fair plan. Brokers perform extensive searches to see if priority homeowners insurance coverage can be obtained in traditional markets before they are allowed to proceed with a fair planning application.
- Please fill in the application: If you are working with a broker, you can fill out the application, choose the right amount of coverage and approval, and help you calculate the fair market value of your home. Once the application is complete, you will receive an instant rate estimate. Please note that if you apply for a fair plan without a broker, you will not be able to get an immediate price estimate.
- Planned home inspection: Depending on where you are home, representatives of the fair plan may ask for a timeline for the home inspection. This will help them to better understand the insuredness of your home. For example, if your home is in a heavily wooded area where there is a high risk of wildfires, it could affect the coverage you are eligible for.
- Paying insurance premiums: Once your application is approved, the final step is to pay your first month’s premiums. The first payment will take effect. Fairplan homeowners have the option to pay three or the full monthly fee.
