New Legislation Introduced to Overhaul California FAIR Plan, Enhancing Support for Wildfire Survivors
California Insurance Commissioner Ricardo Lara and Assembly Insurance Committee Chair Lisa Calderon have announced the introduction of the Make It FAIR Act, a comprehensive legislative effort to reform the California FAIR Plan. This legislation aims to strengthen claims handling, expand coverage options, and improve transparency for residents affected by wildfires.
The Make It FAIR Act responds directly to findings from the California Department of Insurance’s recent Report of Examination, which identified 17 critical areas where the FAIR Plan failed to meet standards related to financial health, governance, and consumer protections. The report highlighted systemic issues that have caused delays, claim denials, and inconsistent decisions for wildfire survivors, particularly in the aftermath of the devastating 2025 Los Angeles wildfires.
Key reforms proposed in the legislation include:
- Expanding homeowners coverage to include protections currently requiring separate policies, such as water damage and liability coverage.
- Increasing staff to better manage claims and consumer complaints.
- Improving programs that help policyholders transition back to the regular insurance market.
- Requiring the FAIR Plan to adopt a strategic plan covering three to five years to improve market responsiveness and policy handling.
- Enhancing transparency through public access to governing meetings and mandating an annual report detailing governance, premiums, and catastrophe response.
- Instituting formal climate risk assessments and reporting consistent with national insurance standards.
- Establishing a capital and liquidity management plan to safeguard against major disasters.
Commissioner Lara emphasized that the failures exposed by recent wildfires have persisted despite prior efforts to reform the FAIR Plan, stating that the Make It FAIR Act will create enforceable requirements to ensure real coverage and accountability.
Assemblymember Calderon underscored the necessity of reliable property insurance for all Californians and highlighted the importance of evolving the FAIR Plan to meet changing market conditions.
This legislation builds on previous initiatives by Commissioner Lara to improve wildfire resilience, including wildfire-safety grants, faster claim payouts, and expanded insurance protections. It represents a critical step in modernizing California’s property insurance safety net amid increasing climate-related disasters.
