Who is Loving the California FAIR plan?

[marindependent]

"8/15/2023 - Hold and Processing Times - In light of the current market conditions in California, the FAIR Plan is experiencing high call volume, resulting in longer hold times. Additionally, these market conditions have affected policy processing times. We aim to review all submissions within 5 business days, and we encourage brokers to utilize the self-service options within the broker portal. Our focus remains on providing quality service. Thank you for your patience during this period."

 

[marindependent]

"9/6/2023 - Payment portal - Please be advised our payment portal provider is experiencing technical difficulties, which is impacting our ability to receive payments. Thank you for your patience as they work on restoring full service levels as soon as possible."

 

[Al3x Lee]

Don't sweat it, there will be no need for the fair plan once the Non-Profit Al3x Lee Democratic Socialist Wealth Tax Citizens Mutual Stock Insurance Corporation of the California Government 501(c)(15) Monopolistic State Sponsored Fund is mandated into law.

I guarantee no wait times because coverage is guaranteed by law. If it's written into the LAW, it must be true. You can trust it because it has my insurance forums pseudonym in it

 

[AZDave]

CA & FL Agents - you guys need more than hugs. You need more pay! Higher commissions for this absolute mess of a market!

 

[Markthebroker]

Don't sweat it, there will be no need for the fair plan once the Non-Profit Al3x Lee Democratic Socialist Wealth Tax Citizens Mutual Stock Insurance Corporation of the California Government 501(c)(15) Monopolistic State Sponsored Fund is mandated into law.

I guarantee no wait times because coverage is guaranteed by law. If it's written into the LAW, it must be true. You can trust it because it has my insurance forums pseudonym in it

NPALDSWTCMSICCG for short.

 

[marindependent]

Apparently the FAIR plan is now quite popular: " Lara said that 3% of Californians now use the FAIR Plan...."

“In the last 60 days, I think the application volume is around 1,000 applications a day right now, which is just astronomical,” said Phil Irwin,...That statement, which Irwin made nonchalantly in the Oct. 4 webinar, visibly shocked Amy Bach, executive director of San Francisco-based nonprofit United Policyholders, who moderated the discussion."Sorry, you’re getting a thousand a day?!” she asked."

It wont stay at just 3% for long with 1000 new applications per day.

[Sorry @shawnmwalker - no one to compliment on this one.]

[EXTERNAL LINK] - California Insurance Crisis: FAIR Plan Gets 1,000 Apps a Day

 

[shawnmwalker]

InsMarineLife,

This one is complicated, I think AlextrebeckLee has this figured out!

 

[shawnmwalker]

MarinersIns, @marindependent

you coaching kids!

 

[Girl Friday]

I don't know about CA, but here in OH, we are writing more FAIR plans in our agency than we have ever seen. Lot's of non-renewals, etc. Crazy. The president of the agency said he has never seen a market like this in over 20 years.

 

[marindependent]

California Insurer of Last Resort Is Unprepared for Big Disaster​

March 14, 2024

California Insurer of Last Resort Is Unprepared for Big Disaster

California's property insurer of last resort told lawmakers that it's financially unprepared to cover the costs of a major catastrophe in the state. The

www.insurancejournal.com

California’s property insurer of last resort told lawmakers that it’s financially unprepared to cover the costs of a major catastrophe in the state.

The plan now faces $311 billion in potential losses, up from $50 billion six years ago, California FAIR Plan president Victoria Roach said in a state legislative hearing Wednesday.

“We don’t have a lot of money sitting around,” she said. “Our rates are not adequate. If we have a major event, we’re going to look to the voluntary market — which is already in a precarious situation — to cover our losses.”

The state-sponsored plan has grown rapidly as private firms including State Farm General Insurance Co., Hartford Financial Services Group, Inc. and Allstate Corp., have retreated, citing the double-whammy of increasing natural disasters and state-imposed limits on premiums.

The plan now covers about 370,000 homeowners, more than double the number five years ago. By next year, its rolls could expand to 500,000, Roach said, further enlarging the potential losses.

Never miss an episode. Follow the Big Take podcast on iHeart, Apple Podcasts, Spotify or wherever you listen. Read the transcript.

The warning came a week after a Bloomberg Green investigation revealed how state-backed insurance plans in California and other disaster-prone states are largely unprepared for the growing costs of wildfires and hurricanes.

The plan has about $200 million “in surplus,” Roach said. It doesn’t make its finances public, nor is it subject to the same kinds of reserve requirements that apply to private insurers.

“We’re one bad fire season away from complete insolvency – it feels like a big gamble,” said Assemblymember Jim Wood, a Democrat from Sonoma County. “If this were on Wall Street, I’m not sure you’d be able to get away with this.”

The plan can’t raise consumers’ premiums to an amount that would cover a shortfall because state restrictions bar them from factoring the cost of reinsurance into their rates, she said.

Roach’s testimony also sets the stage for state Insurance Commissioner Ricardo Lara, who will announce details of his proposed reforms in a press conference Thursday. He’s proposed allowing private insurers to consider future climate risks and the cost of reinsurance when they set premiums, as long as they agree to provide a certain share of coverage in wildfire-prone areas.

Existing rules only allow them to consider historical data and prevent them from basing premiums on reinsurance. Lara has said the reforms will bring private insurers back to the market, alleviating strain on the FAIR plan.

Top photo: Relatives walk through the remains of their family’s home after it was destroyed during the Highland Fire in Aguanga, California, US, on Tuesday, Oct. 31, 2023. A wildfire fueled by gusty Santa Ana winds ripped through rural land southeast of Los Angeles, forcing about 4,000 people from their homes, fire authorities said.

Copyright 2024 Bloomberg.