On the California FAIR Plan? You may have more options than you think

If you're on the California FAIR Plan, odds are you didn't choose it. Your insurer non-renewed you, or nobody else would write your house, and the FAIR Plan was what was left. That's fine as a starting point. The problem is that a lot of people don't realize how much it leaves out until they file a claim.

The short version: the FAIR Plan's basic policy covers fire, lightning, smoke and internal explosion. Wind, hail, vandalism, your belongings and additional living expenses are optional add-ons. It does not cover theft, personal liability or water damage from plumbing and appliances at all.

What is the California FAIR Plan?

It's an insurance pool made up of every property insurer licensed in California, set up under state law in 1968 as the insurer of last resort. It exists for owners who can't get coverage in the regular market, which these days mostly means homes in high fire hazard areas. Hundreds of thousands of California homes are on it now, many of them only because standard insurers pulled back after 2023.

What does the FAIR Plan cover?

• Fire, lightning, smoke and internal explosion, on the basic policy.
• Wind, hail and other extended perils, if you add them.
• Vandalism and malicious mischief, if you add it.
• Other structures, personal property and additional living expenses, if you add them.

What doesn't the FAIR Plan cover?

• Personal liability, so nothing if a guest is hurt and sues you.
• Theft.
• Water damage from a burst pipe, a leaking water heater or an appliance.
• Earthquake and flood, which a regular homeowners policy doesn't cover either.
• Your belongings, other structures and living expenses, unless you added those options.

How the FAIR Plan compares with a standard homeowners policy

Calvo Insurance Agency is a Farmers agency, so the options I work through with people are a standard Farmers policy when Farmers will write the home, or the FAIR Plan with a difference in conditions (DIC) policy next to it when it won't. Here's how they stack up.

FAIR Plan on its own

Fire and smoke are covered. Vandalism, belongings, other structures and living expenses are covered only if you bought those options. Liability, theft and water damage aren't covered. The upside is that it's available in fire zones where standard insurers won't go.

Standard HO-3 homeowners policy

Covers all of it: fire, liability, theft, water damage, belongings, other structures and living expenses. It's the best coverage of the three, but in a lot of high fire hazard areas it simply isn't available right now. You can read more about what one includes on my homeowners insurance page.

FAIR Plan plus a DIC policy

The FAIR Plan handles fire. The DIC policy picks up liability, theft, water damage, belongings, other structures and living expenses. Together they get you close to a standard policy in places where a standard policy isn't on the table.

Not sure which one you have or need? Send me your FAIR Plan declarations page and I'll go through it with you at no cost.

What is a DIC policy?

A difference in conditions policy is written to sit next to the FAIR Plan and cover what it doesn't, such as liability, theft, water damage and additional living expenses. It doesn't duplicate the fire coverage. Policies vary, so read what yours includes, and expect earthquake and flood to still be excluded. You'll have two policies and two bills, but one agent to call about both.

Should you stay on the FAIR Plan?

My honest view is that the FAIR Plan should be treated as temporary when it can be. Underwriting changes, and a home that got turned down two years ago might qualify for a standard policy today, especially after work like a new Class A roof, ember-resistant vents or clearing the area right around the house. California's Safer from Wildfires rules require insurers to give discounts for that kind of mitigation, so it's worth doing even if you stay where you are. I'd check every year at renewal.

How I help FAIR Plan homeowners

1. Review what you have. I go through your current FAIR Plan policy and list exactly what's covered and what isn't, in plain English or Spanish.
2. Look at your options. That might be a standard Farmers policy, a DIC policy to go with your FAIR Plan, or confirming that what you have is the best you can get for now.
3. Close the gaps. I handle the applications and paperwork so the coverage you end up with is written down and in force.

How fast coverage starts depends on the property and on the insurers' own processes, so if you're in escrow or facing a non-renewal date, tell me up front.

Where we help homeowners with the FAIR Plan

We work with owners in fire-prone parts of California, close to home and farther out. Around our Murrieta office that means the foothills and wine country near Temecula and the hillside neighborhoods above Lake Elsinore. Farther away, it includes San Diego County, Los Angeles County, the Bay Area hills, Napa and Sonoma, the Sierra foothills, the Central Coast and the Sacramento Valley.

Who you'll be working with

I'm Javier Calvo. I've been in insurance for more than ten years, and Calvo Insurance Agency has been in Murrieta since 2017. Call me at (951) 383-3000 or email jcalvo@farmersagent.com, and I'll tell you straight whether there's a better option than what you have.