California Insurers Could Hit All Policyholders With Extra Fees to Cover Fire Losses

If the state-mandated FAIR plan can’t cover all claims, Californians could receive insurance bills to cover the difference.

A firefighter fights the flames from the Palisades Fire while it burns homes at Pacific Coast Highway amid a powerful windstorm in Malibu, Calif., on Jan. 8, 2025. Apu Gomes/Getty Images

New rules enacted in September 2024 for the insurer of last resort in California—the Fair Access to Insurance Requirements (FAIR) plan—could leave homeowners insurance policyholders on the hook for fire losses in the Los Angeles area if totals exceed the plan’s ability to pay.

“The bottom line is, the FAIR plan will have enough money to pay claims, but the way it will make sure it has enough money is by assessing all California policyholders, eventually,” Dave Jones, former commissioner of the California Department of Insurance, told host Siyamak Khorrami during a recent episode on EpochTV’s “California Insider.”