On Thursday November 14th, Supervisor Dan Miller, member of the Rural County Representatives of California (RCRC) subcommittee on Homeowners Insurance, met at the Ronald Reagan Presidential Library with California FAIR Plan President Anneliese Jivan and other subject matter experts to discuss the growing crisis of accessibility and affordability of homeowners insurance. The subcommittee was established by RCRC to dig into the issue of the growing loss of homeowners insurance throughout the state's wildland urban interface (WUI) areas and develop a set of recommendations for RCRC to bring to the legislature and Governor's office for consideration.
“It was great to learn about the significant and positive changes the FAIR Plan has made to improve the availability and affordability of homeowner insurance,” said District III Supervisor Dan Miller. “Many residents in Nevada County have been hit hard in regards to homeowners insurance. This meeting gave each county an opportunity to share their community’s specific issues and talk directly with FAIR Plan staff.”
Updates to the FAIR Plan
CA FAIR President Anneliese Jivan explained to the subcommittee that the CA FAIR Plan is very different than typical private insurance companies and is set up to be a safety net for homeowners unable to obtain other homeowners insurance. During her presentation she outlined that with the recent passage of AB 1816 (Daly) signed into law by the Governor on October 12, 2019 makes new headway to help confront the issue. Most notably, AB 1816 expands incentives for private insurance agencies to issue policies in high or very high fire hazard severity zones area in the WUI.
As outlined in the bill's analysis, "The FAIR Plan is a private association of all insurers licensed to write property insurance in California. The FAIR Plan normally operates its program on its own revenues. Members share profits and losses in proportion to market share. In the event that claims exceed its assets, the FAIR Plan may assess its member insurers, subject to approval by the Insurance Commissioner. But insurers can reduce their assessments by submitting write out credits for writing policies…Of the 314 insurers who participated in the FAIR Plan last year, only 81 submitted write out credits. This bill expands the area that qualifies for write out credits by including high or very high fire hazard severity zones as determined and mapped by CAL Fire."
President Jivan explained that these write off credits are a 1:1 dollar ratio that will hopefully provide an strong incentive for the volunteer private insurers to begin re-issuing policies in these areas. AB 1816 also expands the notice of nonrenewal time that insurances are required to provide from 45 days to 75 days.
Jivan also provided clarification to the subcommittee that the CA FAIR Plan offers an Escrow Program that issues wildfire insurance for properties in escrow on an expedited same-day basis.
Additionally, CA FAIR Plan policy holders can cancel their policies at any time once they are able to obtain insurance from private insurers with no penalty, only being required to pay for the dates that the policy is in effect.
There are also ongoing discussions on developing programs designed specifically for homeowners who work to meet hazard mitigation standards on their properties, like those who participate in the County's various fire-wise communities.
RCRC Subcommittee members also heard from the Ventura Fire Department, Venture Planning Department and the City of Thousand Oaks Public Works on the various efforts to reduce and mitigate wildfire that can impact homeowners insurance.
The Subcommittee will continue meeting with the intent of bringing recommendations forward in the coming year.