California’s Lara Wins Decision on FAIR Plan Policies

California Insurance Commissioner Ricardo Lara is happy with another judge ruling that he has the authority to force California’s FAIR Plan to give homeowners the option of purchasing policies that are more comprehensive. FAIR Plan policies were mere barebones policies that do not include Difference in Conditions (DIC) policies.

This policy covers the discharge or the overflow of water into the home, liability, compensation for workers onsite, theft, falling objects, the weight of ice, snow or sleet, or other freezing and the loss of use of the home and the living expenses from that loss.

Lara ordered the FAIR Plan to begin offering those items and it has become a big part of Lara’s Sustainable Insurance Strategy. Modernizing the FAIR Plan — one introduced in 2021 — is a key part of that goal.

In 2021 Los Angeles Superior Court Judge Mary Strobel upheld the Commissioner’s authority to order the FAIR Plan to offer the increased coverage. The FAIR Plan appealed and last week Los Angeles Superior Court Judge Curtis Kin upheld Judge Strobel’s decision.

“This ruling is a win for homeowners and an essential part of our ongoing strategy during this unprecedented time in our state. It upholds my authority to implement measures that enhance the availability and affordability of insurance coverages for consumers,” Lara said. “While we continue to pursue long-term insurance solutions to safeguard Californians from climate change, it’s essential that homeowners have a strong short-term option in the California FAIR Plan.”

Until this positive decision, homeowners using the FAIR Plan had to purchase a DIC policy elsewhere which ended up costing them more money.

“Many FAIR Plan policyholders are seniors or families who cannot afford to pay these unexpected costs out-of-pocket. The sooner that the FAIR Plan can offer a more comprehensive policy option, the better for many Californians,” Lara added. “This ruling is a step forward in achieving a balanced and robust insurance market that meets the needs of Californians.”

Lara said the FAIR Plan insurers 330,000 homes and 40% of those policyholders do not have a DIC policy.

Source link: California Department of Insurance  —

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