The California FAIR Plan Association (wherein "FAIR" stands for "Fair Access to Insurance Requirements"), or California FAIR Plan is an insurance pool created by the state of California for property owners who cannot find insurance in the state's price-regulated market. (It is an insurer of last resort, for people who do not want, or feel they cannot afford, insurance in the "non-admitted", or "surplus line", market.) The FAIR Plan was established in August 1968 by a statutory amendment to the California Insurance Code, and is regulated by the office of the California Insurance Commissioner. FAIR plan policies provide basic fire coverage, (fire, lightning, and smoke damage) but do not include tree damage, water damage, theft, or liability coverage. If the FAIR Plan does not have the money to pay out all claims, it collects money from insurance companies that operate in California.
The California FAIR Plan is not a state agency and is not supported by federal, state, or local funds. The California FAIR Plan is an involuntary syndicated fire insurance pool comprising all insurers licensed to write and engaged in writing basic property insurance in California. All licensed property/casualty insurers which write basic property insurance required by Insurance Code sections 10091(a) and 10095(a) are members of the California FAIR Plan. The California FAIR Plan issues policies on behalf of its member companies. Each member company participates in the profits, losses, and expenses of the California FAIR Plan in direct proportion to its market share of business written in the state.
According to 2020 data, the FAIR Plan covers 2.5 percent of the statewide market share, but 20.4 percent of the market share in ZIP codes at high risk from wildfires. Between 2020 and 2024, the number of homes covered by FAIR Plan policies more than doubled, while the Plan's total exposure (including commercial properties) nearly tripled. Between 2023 and 2024, the number of homes in the ZIP code affected by the January 2025 Palisades fire covered by the FAIR Plan almost doubled.
As of January 17, 2025, the FAIR Plan estimated that it covered 22 percent of the structures affected by the Palisades Fire, with a potential exposure upwards of $4 billion, and 12 percent of the structures affected by the Eaton Fire, with a potential exposure of over $775 million. As of January 10, 2025, it had only $377 million available to pay out claims, in addition to $5.75 billion in reinsurance. However, FAIR can only access reinsurance after it has paid out $900 million in claims. To make up the shortfall, according to Consumer Watchdog, all California homeowners could face a $1,000 to $3,700 surcharge as FAIR can seek money from private insurers who would likely pass the charge to their customers.
As of December 2025, the California FAIR Plan reported continued increases to its total exposure, policies in force, written premium, and new business. The California FAIR Plan cites increasing risks due to climate-driven wildfires as one reason for California policyholdersâ increased reliance on the California FAIR Plan. Though the California FAIR PlanâÂÂs share of the insurance market has increased throughout its existence, its goal is not to increase market share. Instead,â¯the California FAIR Plan seeks to ensure that basic insurance coverage is available to all qualified property owners as the law outlines while promoting use of the voluntary market. The California FAIR Plan has taken steps towards the depopulation of its policies such as the establishment of a clearinghouse program to help place policies in the voluntary market.