The Ins and Outs of the CA Fair Plan; What does it Cover?
The Ins and Outs of the CA Fair Plan: What Does It Cover?
Living in California comes with its own set of challenges, including the ever-present threat of wildfires. If you’re a homeowner, protecting your property from these devastating events is a top priority. But what happens if your insurance company denies coverage due to high wildfire risk? That’s where the California Fair Plan comes in.
What is the CA Fair Plan?
The California Fair Plan Association (CFP) is a state-mandated insurance pool that provides basic fire insurance to homeowners and businesses who are unable to obtain coverage in the standard market. It was created in 1968 due to the growing concern over rising insurance costs and limited coverage options in fire-prone areas.
Who is Eligible for the CA Fair Plan?
The CA Fair Plan is available to anyone who:
* Owns a residential or commercial property in California
* Is unable to obtain standard fire insurance due to wildfire risk
* Meets the eligibility criteria set by the CFP
What Does the CA Fair Plan Cover?
The CA Fair Plan offers basic fire insurance coverage for the following perils:
* Fire: This includes damage caused directly by fire, as well as smoke, heat, and water damage resulting from firefighting efforts.
* Lightning: Coverage for damage caused by direct lightning strikes.
* Explosion: Includes coverage for damage caused by explosions, except those caused by nuclear reactions.
* Internal Explosion: Coverage for damage caused by internal explosions, such as those caused by boilers or water heaters.
* Riot: Coverage for damage caused by riots and civil commotion.
* Civil Commotion: Coverage for damage caused by civil commotion, such as vandalism and looting.
* Aircraft: Coverage for damage caused by aircraft crashes.
* Vehicles: Coverage for damage caused by vehicles, including cars, trucks, and motorcycles.
What Does the CA Fair Plan Not Cover?
The CA Fair Plan does not cover the following perils:
* Earthquake: Earthquake insurance is available through a separate state-run program called the California Earthquake Authority (CEA).
* Flood: Flood insurance is available through the National Flood Insurance Program (NFIP).
* Personal Property: The CA Fair Plan only covers damage to the structure of your home or business, not your personal belongings.
* Additional Living Expenses: If you are displaced from your home due to a covered loss, the CA Fair Plan does not cover the cost of temporary housing or other living expenses.
How Much Does the CA Fair Plan Cost?
The cost of CA Fair Plan insurance varies depending on the value of your property, its location, and its wildfire risk. In general, however, it is more expensive than standard homeowners insurance.
How to Get CA Fair Plan Insurance
If you are interested in obtaining CA Fair Plan insurance, you can contact your insurance agent or broker. They will be able to help you determine if you are eligible and assist you with the application process.
Conclusion
The CA Fair Plan is a valuable resource for homeowners and businesses who are unable to obtain standard fire insurance. While it does not offer the same level of coverage as a standard policy, it can provide much-needed peace of mind in a state with a high risk of wildfires.