California FAIR Plan: What It Covers, What It Costs, and How to Leave It

The California FAIR Plan is the state's property insurer of last resort. It is an association of every insurer licensed to write property insurance in California, and it sells basic fire insurance to owners who cannot find coverage in the regular market. A FAIR Plan dwelling policy covers fire, lightning, internal explosion, and smoke. It is not a full homeowners policy, so most buyers pair it with a difference in conditions (DIC) policy to add back liability, theft, and water damage. If a wildfire nonrenewal just pushed you toward it, you are in a large group, and there are defined routes back out.

The plan has grown from a backstop into a mainstream insurer within a few years. As of June 2026 it had 696,562 policies in force and $768 billion of insured exposure, up 157 percent and 250 percent since September 2022.^[1] This guide explains what the policy pays for, what it leaves out, how you get one, what drives the premium, and how to get back to a regular insurer. If you have not yet been placed on the plan, start by requesting a FAIR Plan quote so the regular market is checked first.

What is the California FAIR Plan?

The FAIR Plan is not a government program and not an ordinary private insurer. It is an association created by the Legislature after the riots and brush fires of the 1960s left many properties uninsurable. Every insurer licensed to write property insurance in California must be a member, and each member shares the plan's profits and losses in proportion to its share of the state market. The plan is not a state agency, is not funded by taxpayers, and is not rated by A.M. Best.^[2]

The statute gives the plan four purposes: to stabilize the property insurance market, to make basic property insurance available, to keep as much business as possible in the normal market of admitted insurers and surplus line brokers, and to spread the cost of hard-to-place property fairly among insurers.^[3] The plan itself describes its goal as attrition, meaning it wants policyholders to leave for the regular market as soon as they can.^[2]

By statute, "basic property insurance" means the perils insured under the standard fire policy and extended coverage endorsement, plus vandalism and malicious mischief, plus anything the Commissioner approves. Manufactured homes and mobilehomes are covered on the same terms as other homes, a change made by SB 525 in 2025.^[4]

What does the California FAIR Plan cover?

The FAIR Plan dwelling fire policy is a named peril policy. It pays only for damage caused by the specific causes of loss listed in the policy: fire and lightning, internal explosion, and smoke. Vandalism and malicious mischief can be added for an extra premium. The policy is available for owner-occupied one-to-four-unit homes, seasonal rentals, one-to-four-unit rentals leased for at least a year, renters' personal property, and condominium unit owners' personal property and improvements.^[5] Landlords and condo owners should read our guide to the FAIR Plan for rental property and condos, which walks through Fair Rental Value and the options a rental needs.

The policy is narrower than a standard homeowners policy by statute, and the Assembly Insurance Committee's own background paper notes that it still satisfies mortgage lenders, which is often the immediate reason people buy it.^[6] The Department of Insurance describes it as a standard fire policy on the structure and contents that does not include liability or burglary coverage.^[7]

Coverage limits have climbed as the plan absorbed more of the market:

The commercial expansion was aimed at homeowners associations, condominium developments, and larger businesses that could not find full limits anywhere else.^[6] Our guide to the FAIR Plan commercial policy covers who qualifies, the high value tier and what the commercial form leaves out, and our guide to commercial property insurance shows how a standard policy compares.

What does the FAIR Plan not cover?

The gap between a FAIR Plan policy and a homeowners policy is wide. The FAIR Plan does not cover personal liability, theft, or water damage, and the plan's own DIC page lists exactly those three as the coverages a DIC policy supplies.^[8] A burst pipe, a guest injured on your steps, or a break-in are not paid by the FAIR Plan alone. In December 2025 the California Court of Appeal ruled that the FAIR Plan is not required to offer expanded liability coverage, so closing the gap remains the policyholder's job.^[6]

The standard fix is a difference in conditions policy, known in the trade as the wrap. It is a second policy from a private insurer that adds back liability, theft, and water damage, and often loss of use. The FAIR Plan does not sell DIC policies; the Department of Insurance keeps a list of insurers that do.^[8] Limits, deductibles, and effective dates on the two policies have to line up, so read our full guide to DIC insurance before you bind, and get a DIC quote at the same time as the FAIR Plan application, not after.

Who needs the FAIR Plan?

You do not shop for the FAIR Plan. You land there after a search of the regular market comes up empty. The plan's own application page says that if coverage is available in the traditional marketplace, the FAIR Plan is not right for you, and the Department of Insurance's first recommendation is to shop the market.^[9][10] The plan is meant as a temporary solution while a traditional carrier is unavailable.^[5]

In practice the people who need it fall into a few groups: owners nonrenewed after a wildfire risk review, buyers in escrow in a high-fire ZIP code who cannot get a standard quote before closing, owners of older or unusual homes that admitted carriers decline, condominium associations that cannot find full limits, and landlords with rentals in brush areas. The Department of Insurance calls it the last option and suggests surplus lines only if nothing else is available.^[11]

How do I apply for the California FAIR Plan?

You apply through a licensed insurance broker, not directly. The Department of Insurance says applications go through an agent or broker registered to sell FAIR Plan coverage, or through the plan's broker referral line.^[10] The plan's site adds that not every broker is registered with it, and that a broker may be able to offer other options that are more complete than the FAIR Plan.^[5]

1. Your broker shops the regular market first

   The broker performs a diligent search among admitted carriers. The FAIR Plan exists only for property the traditional market will not write.^[9]

2. The broker submits the FAIR Plan application

   FAIR Plan staff cannot advise you on coverages or limits, and the plan does not estimate rebuilding cost, so your broker sets the dwelling limit with you.^[9]

3. Add the DIC policy

   Because the FAIR Plan does not sell DIC, the wrap comes from one of the insurers on the Department of Insurance's DIC list, arranged by the same broker so limits and dates match.^[8]

4. Pay and set up autopay

   Full payment has no fee. Installment plans exist, and the plan now accepts automatic payments.^[12]

Our step-by-step guide to getting a California FAIR Plan quote covers what the broker needs, the inspection and three-business-day decision, and what makes a property ineligible.

There is no extra cost for using a broker on a FAIR Plan policy.^[9] The Department of Insurance guide states that a broker may not charge a broker fee for placing FAIR Plan coverage on its own.^[7] Menlo Insurance Services is a licensed California broker and, since September 2026, a registered California FAIR Plan broker. We shop the admitted and surplus lines market for your home first, place the FAIR Plan policy if nothing else is available, and quote the DIC wrap or a dwelling fire policy at the same time.

How much does the California FAIR Plan cost?

FAIR Plan rates are regulated. Insurance Code section 10100.2 says they may not be excessive, inadequate, or unfairly discriminatory, and must be actuarially sound so that premiums cover expected losses, expenses, and taxes.^[13] Because the plan inherited the homes the regular market nonrenewed, its book is concentrated in the areas with the highest wildfire risk, and the wildfire portion of the premium is the largest cost driver. Your premium reflects the ZIP code's wildfire territory, the dwelling limit, construction, and what has been done to harden the home.

The trend is up. The Department of Insurance's 2026 list of approved rate filings shows the FAIR Plan's dwelling fire rate filing closed as approved on April 6, 2026, at 29.1 percent against a 35.6 percent request.^[14] The plan told reporters the new rate takes effect October 15, 2026, that not every customer will see that amount, and that some will see a decrease.^[15] Our separate guide covers the 2026 FAIR Plan rate increase, what drives cost by ZIP code, and what you can do about it.

Two other cost facts matter. First, the FAIR Plan price is only part of your total, because the DIC policy carries its own premium; compare the combined figure against any standard quote you can still get. Second, member insurers, not policyholders, absorbed the first half of the $1 billion assessment approved in February 2025 after the Los Angeles fires; the other half can be recovered through a temporary supplemental fee on policies only with a Prop 103 rate approval.^[16] Our guide to the FAIR Plan temporary supplemental fee lists which insurers were approved to charge it.

What discounts does the FAIR Plan offer?

The plan applies up to 12 wildfire hardening discounts to the wildfire portion of the premium for policies effective on or after November 15, 2025. Five cover the immediate surroundings (cleared decks, a five-foot noncombustible zone including fences and gates, sheds more than 30 feet away, defensible space compliance), five cover the structure (Class-A roof, enclosed eaves, ember-resistant vents, multi-paned windows or shutters, six inches of noncombustible material at the base of exterior walls), one is a completion bonus for meeting all ten, and one is a community discount for a Firewise USA site or a Fire Risk Reduction Community. A dwelling fire policyholder who earns all 12 may see up to 16.4 percent off the wildfire portion; a commercial policyholder up to 13.8 percent.^[17]

These are the same actions the Department of Insurance's Safer from Wildfires framework lists, and the state's regulation requires every insurer, not just the FAIR Plan, to give discounts for them.^[18] Keep receipts and photos. The same evidence that earns a FAIR Plan discount is what a regular carrier will ask for when you try to leave.

How do I pay, and what if I miss a payment?

Paying in full has no installment fee. The plan also offers a three-payment plan (40, 30, and 30 percent) and an eleven-payment plan, each with a $4.50 fee per installment on dwelling fire and commercial policies. ACH payments are free; card payments carry a 3.5 percent fee; a returned payment costs $25.^[12] AB 290, signed in October 2025, requires the plan to run an automatic payment system by April 1, 2026, bars it from cancelling or nonrenewing you for declining autopay, and gives installment payers the standard grace window before cancellation.^[19]

How do I get off the California FAIR Plan?

The exits are written into statute and regulation.

The clearinghouse. Insurance Code section 10095 requires a residential clearinghouse through which regular insurers can review FAIR Plan policies and make offers, and a commercial clearinghouse that began July 1, 2024. Offers reach you only through your broker of record, and nonadmitted insurers may participate only after admitted insurers have had the first option.^[20] The Assembly committee's background paper describes that first window as 30 days.^[6] No transfer is forced.

The Sustainable Insurance Strategy. Under the Department of Insurance's strategy announced in September 2023, insurers that use catastrophe models and net reinsurance costs in their rates must commit to writing in distressed areas at no less than 85 percent of their statewide market share, and homes that comply with Safer from Wildfires get priority in moving back to the admitted market.^[21] The Department calls the FAIR Plan the last option,^[11] and Insurance Code section 678 requires every residential nonrenewal notice to describe the FAIR Plan as the insurer of last resort and to explain DIC policies.^[22]

Shop at every renewal. Carrier appetite in high-fire ZIP codes changes year to year, so do not let a FAIR Plan policy auto-renew without a market check. If the admitted market says no again, a surplus lines carrier may write the whole home on one policy. Our guides to surplus lines insurance, admitted vs non-admitted carriers and Delos Insurance explain what that means, and our guide to high-risk homeowners insurance in California walks through every option after a nonrenewal. Start with a quote for a high fire risk home.

This guide is for educational purposes and summarizes California FAIR Plan provisions and public California Department of Insurance guidance. Your policy's specific terms, conditions, and endorsements control. Talk to a licensed broker about your actual exposures.

The Bottom Line

The California FAIR Plan sells basic fire coverage when no regular carrier will write your property. It is not full homeowners insurance, so pair it with a difference in conditions policy to add back liability, theft, and water damage. Treat the placement as temporary: harden the home and keep the receipts, watch the clearinghouse for offers through your broker, and have the market shopped at every renewal instead of letting the policy auto-renew.