Fire insurance has become more costly—if it's available at all—in California, leading more Golden State homeowners to turn to the FAIR Plan, a government-backed insurer of last resort. But as wildfires have set thousands of homes worth tens of billions of dollars ablaze across Los Angeles, some fear FAIR's funds will run dry—forcing all California policy holders to make up the shortfall.
Consumer Watchdog, a non-profit group that has previously sounded alarms about FAIR's solvency, warned last year that California homeowners could be on the hook for a $1,000 to $3,700 surcharge—or possibly even more if a major fire event were to transpire. Under the plan, FAIR can seek a top-up from private insurance companies, which would in turn pass on the charge to customers.
