The Indicator from Planet Money Who's on the hook for California's uninsurable homes?
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Jan 16, 2025 Southern California's wildfires are wreaking havoc, forcing homeowners to seek alternatives for fire insurance. The FAIR Plan has emerged as a crucial option, but it faces serious challenges in a fraught insurance market. As traditional insurers retreat, this state-funded plan is becoming a last resort for many. The rising costs, limited coverage, and climate change pressures reveal the fragile state of California's insurance landscape, leaving homeowners worried about their financial security and the future of their homes.
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Cale Beck's Insurance Woes
- Cale Beck's home insurer dropped his fire coverage, citing overgrowth and zip code risk.
- He had to get coverage through California's FAIR Plan, an insurer of last resort.
California's FAIR Plan
- California's FAIR Plan provides fire insurance to those unable to get traditional coverage.
- It's run by private insurance companies but mandated by state law.
FAIR Plan Costs and Coverage
- FAIR Plan premiums are typically higher, and coverage is more limited than traditional insurance.
- Amy Bach of United Policyholders advocates against relying on the FAIR Plan.