Is My Home Eligible for the California FAIR Plan?

You may be eligible for California wildfire coverage through the state’s Fair Access to Insurance Requirements (FAIR) Plan if a broker has determined that no standard homeowners insurance provider will cover your property at an affordable rate. However, the California FAIR Plan is expensive and provides little coverage, so it should only be used as a short-term buffer until sustainable private coverage becomes available.

For more information about the FAIR Plan in California, including what it covers and how you can apply for a policy, read below.

On This Page

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  What Is the California FAIR Plan?

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  How Does the California FAIR Plan Work?

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  What Does the California FAIR Plan Cover?

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  Who Is Eligible for the California FAIR Plan?

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  How Much Does the California FAIR Plan Cost?

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  How To Apply for the California FAIR Plan

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  California FAIR Plan Alternatives

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  FAQs

What Is the California FAIR Plan?

The California FAIR Plan is an insurance pool set up to provide fire insurance coverage for property owners in high-risk areas in California. As of September 2024, the FAIR Plan insures over 460,000 homes and businesses.^[1] However, it generally provides limited coverage at a high price, so it is advertised as only a “temporary safety net” to keep property owners covered until they can find an affordable policy from a traditional insurance company.^[2]

How Does the California FAIR Plan Work?

Although it was established by the state government, the California FAIR Plan Association is not a public agency funded by taxpayer dollars. Instead, it is funded collectively by all of the licensed property and casualty (P&C) insurers that do business in California.^[2] As a result, when a FAIR Plan policyholder experiences a covered loss, the cost of paying out the claim is distributed among every insurance company so that no one insurer has to shoulder the full cost.

What Does the California FAIR Plan Cover?

A basic policy from the California FAIR Plan only insures your home and belongings against fire, lightning, explosions and smoke. For a higher premium, you can also secure coverage against damage from windstorms, hail, riots, aircrafts, vehicles, volcanic eruptions and vandalism or malicious mischief, and you can insure property like plants, fences, awnings, outdoor radio and television equipment, signs and building alterations.^[3]

Furthermore, the FAIR Plan offers the following optional coverage types:^[3]

• Inflation guard: Inflation guard coverage automatically raises your dwelling insurance and other coverage limits as necessary to keep up with inflation. This coverage type is automatically included in FAIR Plan policies, but you can decline it if you so choose.
• Replacement cost: Replacement cost coverage ensures that your home and belongings are insured at the cost of replacing them rather than their actual cash value (ACV). You should note that your home is automatically covered at its replacement cost if it is no more than 25 years old.
• Fair rental value: If your home becomes uninhabitable as a result of a covered loss, fair rental value coverage pays you what your home would have rented for at that time so you can cover certain living expenses. This coverage functions similarly to loss of use insurance in a standard homeowners policy.^[4][5]
• Ordinance or law: If your home needs to be brought up to local building codes after it is damaged or destroyed by a covered peril, ordinance or law coverage can take care of extra costs that exceed the basic repair or replacement expenses. You can purchase up to 10% of your dwelling coverage limit in ordinance or law coverage.
• Debris removal: You can buy debris removal coverage to help cover costs related to cleaning up debris from your property after it is damaged by a covered peril, though the amount of debris removal coverage cannot exceed 5% of your combined dwelling, other structures and personal property coverage limits, assuming your policy includes optional other structures coverage.

What Isn’t Covered?

California FAIR Plan insurance does not include personal liability coverage, nor does it cover water damage or theft. That said, Insurance Commissioner Ricardo Lara is in the process of seeking reforms that may eventually lead to these perils being covered by the FAIR Plan. In the meantime, you can obtain these coverages by purchasing a supplemental difference in conditions (DIC) insurance policy.^[6]

You should also note that, like a standard homeowners insurance policy, the FAIR Plan doesn’t cover damage from floods or earthquakes. Fortunately, you can obtain government-backed coverage for these perils through the National Flood Insurance Program (NFIP) and the California Earthquake Authority (CEA).

Who Is Eligible for the California FAIR Plan?

Dwelling policies from the California FAIR Plan are available to renters and the owners of owner-occupied homes, condo units and rental units.^[7] Meanwhile, commercial policies are available to the owners of habitational buildings, retail shops, manufacturing businesses, office buildings, buildings under construction and farms or wineries.^[8]

Keep in mind that you generally won’t qualify for FAIR Plan coverage unless a broker determines that there is no accessible coverage for you on the traditional insurance market.^[9]

How Much Does the California FAIR Plan Cost?

The average cost of a FAIR Plan policy coupled with DIC insurance was $3,200 per year in 2022.^[10] In comparison, homeowners insurance costs an average of only $1,480 per year in California in 2024.^[11] The reason California FAIR Plan coverage is so expensive despite providing fairly bare-bones protection is that practically all FAIR Plan policyholders are considered high risk for insurance purposes.^[10]

How To Apply for the California FAIR Plan

You cannot directly apply for FAIR Plan coverage online; rather, you must apply for coverage through an insurance broker who will first search for coverage on the private market and then sign you up for FAIR Plan insurance if no other alternative is available. The California FAIR Plan website enables you to search for brokers who can help you in the application process.^[9]

California FAIR Plan Alternatives

The best alternative to the California FAIR Plan is a standard homeowners insurance policy. If you live in a wildfire-prone region, it is possible for a home insurance company to deny you coverage, charge you higher premiums or even exclude fire coverage from your policy.^[12] Nevertheless, regulations passed in December 2024 require insurance carriers to expand their coverage offerings in wildfire-distressed areas, potentially making it easier for high-risk homeowners to find coverage from private insurers.^[13]