The California FAIR Plan — Yes, all California Homeowners do Have an Option for Fire and Peril Insurance
A visit to California’s Department of Forestry and Fire Protection website reveals a grim yet unsurprising statistic: over 8,700 wildfires have consumed more than 4.1 million acres this year alone. These blazes have resulted in more than $1.8 billion in damage statewide and have destroyed over 9,200 structures. What’s more, it is becoming more difficult to find or keep full insurance coverage in the wake of these disasters. The reason: many insurance carriers refuse to issue or renew policies in residences is near a fire zone. Unfortunately, policy cancellations and non-renewals in these areas have become a new normal. But without peril insurance, you place your security in the hands of nature, a predictably dangerous force.
Safety & Security You Need
When a standard market doesn’t provide coverage for your home, The California Fair Plan Association becomes a viable option. Be advised the association is not an official state agency. It is a collective of carriers established to ensure that all Californians can have access to insurance not available through standard channels. The FAIR Plan Dwelling Fire Policy is what is called a named peril policy. So, this means it provides coverage only for damage caused by the specific causes of loss listed in the policy. In this case, that refers to events tied to fires and natural destruction.
What is a “Named Peril” that qualifies for coverage under the FAIR Plan?
- Fire or Lightning
- Internal Explosion
- Smoke
Each of these perils represents a danger to your family, home, and property. By ensure you remain protected, you can live with peace and security.
Optional Perils (for an additional premium)
- Extended Coverage (explosion, windstorm or hail, riot or civil commotion, aircraft, vehicles, and volcanic eruption)
- Vandalism or Malicious Mischief
You can select any of these according to the risk level of where you live.
Understand Your Options: Peril Insurances vs Alternatives
Homeowners should consider the FAIR Plan as a last resort if they’ve explored all other alternatives. The Fair Plan policy does not include many important coverages such as:
- Theft
- Water damage
- Liability
A separate Difference in Conditions (DIC) policy along with the Fair Plan would need to be obtained for full coverage. Therefore, both policies combined equal a standard homeowners’ policy. At Grand Mutual, we can help you understand precisely what you need in your plans and how to ensure you achieve full coverage. If there are any gaps in your home insurance policy, we find a way to fill them.
Not only is the scenario of not having peril insurance in place financially and emotionally stressful during wildfire season, but it also affects both potential and existing homeowners’ ability to get mortgage financing. Also, lenders require fire insurance as a baseline coverage.
Grand Mutual Stands Beside You
Grand Mutual has successfully been able to place our clients with coverage, even in high-brush area zones. And, if coverage isn’t available through conventional carriers, we can coordinate FAIR Plan coverage with many carriers that will provide a DIC policy. Additionally, there could be a multi-policy discount for bundling your home and auto insurance for optimal savings.
Stay safe this season. Grand Mutual has you covered. From peril and fire insurance to all other means of security, the leading Los Angeles insurance agency is here for you.
