Wildfires spur reminder of homeowner insurance options
California FAIR Plan offers backstop for hard to place policies
SACRAMENTO, Calif. – October 22, 2015 – (RealEstateRama) — With two of the largest fires in California history recently devastating the northern part of the state, unseasonably high fall temperatures and fire season extended well into the fall, it is more important than ever to make sure homeowners and renters have the insurance coverage they need in case disaster strikes. California consumers in high-risk fire areas across the state are reminded that fire coverage is available everywhere in the state.
The Department of Insurance is working to remind agents and brokers that insurance coverage in high-risk fire areas is available to all homeowners. The California Fair Access to Insurance Requirements plan, commonly known as the FAIR Plan, is the insurer of last resort for residents unable to find coverage through other insurers.
The department also has resources available to help make sure Californians get the coverage they need. The department’s website has a homeowner comparison tool, and a list of insurance companies licensed to sell homeowner insurance in California which can be used to shop for available coverage in an area and compare price and coverage features.
“Consumers need to know that insurance is available,” said Commissioner Dave Jones. “It is important to shop around to make sure you are getting the coverage that is right for you. If you are not able to find the coverage you need, the department is here to help. Call us or ask your agent or broker about the options available, including the FAIR Plan.”
The FAIR Plan provides insurance coverage to homeowners unable to purchase insurance for their home or business in the conventional insurance market. The FAIR Plan provides coverage for the perils of fire or lightning, internal explosion and smoke. For an additional premium, extended coverage (windstorm, hail, explosion, riot or civil commotion, aircraft, vehicles, and volcanic eruption) and vandalism or malicious mischief coverage may be added to the policy.
Since the FAIR Plan policy does not cover all the perils insured under a traditional homeowner insurance policy such as theft or liability, consumers may want to consider purchasing a Differences in Conditions policy in addition to the FAIR Plan policy that will cover these additional risks. An agent or broker should be able to locate an insurance company that sells this type of coverage. The FAIR Plan policy meets the minimum coverage required by mortgage companies.
In addition to the FAIR Plan, consumers can turn to the non-admitted or surplus lines market to find the coverage they need. This type of policy is sold through licensed surplus lines brokers. An agent or broker should be able to locate a surplus lines broker who can help them search the non-admitted market to locate an insurer willing to insure their home.
The department sent a notice to agents and brokers reminding them of their obligation to assist consumers in purchasing insurance coverage for properties that are difficult to insure. The notice reminds insurance professionals of the many resources available to assist with finding the appropriate coverage including department resources, surplus lines and the FAIR Plan.
- Consumers may purchase insurance from the FAIR plan, if they receive three declinations from insurance companies in the traditional admitted market.
- The FAIR Plan website
- CDI residential insurance resources
- Residents are also urged to do a home inventory. Free apps are available from the Insurance Information Institute iii.org (Know your Stuff app) and the National Association of Insurance Commissioners naic.org (My Home scr.APP.book).Both are free for iPhone and Android phones.
- Property owners and renters are also reminded to make sure they have enough coverage to rebuild their home, which is based on the cost per-square-foot to build a home in their area, and the particular building materials and characteristics of their home.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $259 billion in premiums annually in California. In 2014 the California Department of Insurance received more than 175,000 calls from consumers and helped recover over $54 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.
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