The California FAIR Plan Financial "Situation"

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From the Insurance Journal By L.S. Howard | January 16, 2025

Will California's FAIR Plan Have Enough Cash for Its Wildfire Claims?


"There has been some question about whether California's insurer of last resort – the FAIR Plan – has enough cash on hand to pay for its share of wildfire claims. While cash is limited and reinsurance has a deductible that exceeds available cash, the state appears likely to step in to provide a mechanism to help finance costs.

In March 2024, Fair Access to Insurance Requirements (FAIR) Plan had $336 billion of property exposure with capital of just $200 million, and $700 million of cash on hand, according to Victoria Roach, who testified before the California Assembly Insurance Oversight Committee on March 13. (Editor's note: Current figures cannot yet be confirmed).

According to FAIR Plan statistics, it has $5.9 billion of exposure to the Pacific Palisades (where the fires are raging) — its fifth highest wildfire exposure concentration."

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