Daily P&C Insurance News

Assembly Bill 1680, the Make It FAIR Act, authored by Assemblymember Lisa Calderon and sponsored by Insurance Commissioner Ricardo Lara, aims to reform the California FAIR Plan by improving claims handling, expanding coverage options, and increasing transparency following issues revealed in a recent Department of Insurance examination. The bill addresses systemic problems like delays and denials for wildfire survivors, including requirements for more comprehensive homeowners coverage and better customer service.

Insurance Commissioner Ricardo Lara and Assemblymember Lisa Calderon introduced the Make It FAIR Act to overhaul the FAIR Plan, implementing reforms from a Department of Insurance report that found non-compliance in 17 areas related to finances, governance, and consumer protections. Key changes include comprehensive homeowners coverage to eliminate the need for separate policies for water damage and liability, addressing long-standing issues since 2019.

Sen. Adam Schiff and 15 congressional allies demanded explanations from nine insurers, including State Farm and the FAIR Plan, on itemized receipt requirements blocking wildfire victim payouts after the 2025 Los Angeles fires. The California Department of Insurance is conducting a market conduct exam on State Farm’s claims handling amid complaints, while new laws allow up to 60% of personal property coverage without detailed inventories.

Sen. Adam Schiff and Rep. Judy Chu led a congressional letter pressing major insurers to justify strict documentation demands delaying payouts to Los Angeles wildfire victims. The effort highlights potential violations of state insurance codes and calls for clearer policies on adjuster assignments and contents coverage advances.

A 2025 report identifies a decisive turning point in California’s property insurance with admitted carriers contracting and spillover into surplus lines and the FAIR Plan amid worsening wildfire risks. State regulations are pushing FAIR Plan changes while large insurers like CSAA and Mercury plan average 6.9% homeowners rate hikes in 2026.

Insurance Commissioner Ricardo Lara proposes rules allowing insurers to factor future climate risks into rates if they commit to writing more policies in high-risk wildfire areas, addressing restrictions that contributed to seven top insurers pausing new business. The plan aims to stabilize the market as climate change increases wildfire frequency, with industry groups viewing it as an initial step.