The California FAIR Plan, Explained

Key takeaways

• The FAIR Plan is a statutory pool of every licensed property insurer in California, not a state agency and not taxpayer funded.
• Its dwelling policy covers fire and lightning, internal explosion, and smoke. Water damage, theft and liability need a separate Difference in Conditions (DIC) policy.
• The Department of Insurance lists a $3 million residential limit. Confirm the limit on your own policy with your broker.
• The state's Sustainable Insurance Strategy aims to shrink the FAIR Plan by requiring insurers that use catastrophe models to write more policies in wildfire-distressed areas.
• A sounding report checks the parcel against CAL FIRE's Fire Hazard Severity Zone map service; confirm the zone on the state's current map before you rely on it.

What the FAIR Plan is

The California FAIR Plan Association was created by statute, California Insurance Code sections 10090 et seq., in August 1968, as an insurance placement facility for homeowners who could not find coverage in the regular market. In its own words it is “not a state agency, nor is it a public entity,” and there is no public or taxpayer funding. Every insurer licensed to write property and casualty business in California is a member. The FAIR Plan issues policies on their behalf, and each member shares in its profits, losses and expenses in proportion to its market share. A governing committee runs it, and the Department of Insurance regulates it.

The FAIR Plan describes itself as an insurer of last resort and a temporary safety net. Its stated goal is attrition: it expects most homeowners to move back to a regular carrier once one will write the policy.

It has grown fast. The FAIR Plan's key statistics show 696,562 dwelling and commercial policies in force as of June 2026, up 157% since September 2022. Total exposure reached $768 billion, up 250% over the same period, and written premium reached $2.04 billion, up 212%.

What a dwelling policy covers, and what it leaves out

The FAIR Plan's Dwelling Fire Policy is a named-peril policy: it pays only for damage from the causes of loss it lists. Those are fire and lightning, internal explosion, and smoke. Coverage for vandalism and malicious mischief is available at extra cost. The policy is written for owner-occupied one-to-four unit homes, rentals, seasonal rentals, renters and condominium unit owners.

Everything else needs another policy. The FAIR Plan's own Difference in Conditions page names water damage, theft and liability as coverages it does not provide, and says a DIC policy is designed to combine with a FAIR Plan policy to give coverage similar to a comprehensive homeowners policy. The FAIR Plan does not sell DIC policies itself. The Department of Insurance keeps a list of insurers that sell a DIC to pair with a FAIR Plan policy. Flood and earthquake are separate policies again; the flood insurance guide covers flood.

A comprehensive FAIR Plan homeowners option has been the subject of a long dispute. The Department of Insurance says the FAIR Plan has fought it in court since 2019, and the Department's FAIR Plan page describes the option as in progress. Until it exists, budget for two policies from two different companies.

Coverage limits

The Department of Insurance's FAIR Plan page lists the limits as $3 million for residential policyholders and $20 million for commercial policies. In March 2025 the Commissioner approved a commercial limit at $20 million per building with a $100 million maximum per location, aimed at homeowners associations, builders, farms and businesses.

The FAIR Plan's dwelling page does not state the residential limit, and its how-to-apply page says its representatives legally cannot advise on coverages or limits. A broker sets the dwelling limit on a real policy; ask for it to be based on the cost to rebuild the home rather than on the plan maximum.

The 2024 to 2026 reforms

The Department of Insurance's Sustainable Insurance Strategy is a set of regulations meant to bring insurers back to wildfire-prone areas and reverse the FAIR Plan's growth. The parts that touch the FAIR Plan, in order:

• July 2024, modernization agreement. In a binding stipulation, the FAIR Plan agreed to a new Plan of Operation with a high-value commercial option, a financial formula to protect policyholders in extreme loss scenarios, and more public reporting.
• November 2024, catastrophe modeling. Under the catastrophe modeling regulation, insurers that use wildfire catastrophe models in their rates must increase their writing of comprehensive policies in wildfire-distressed areas to no less than 85% of their statewide market share.
• March 2025, commercial limits. The commercial limit rose to $20 million per building and $100 million per location.
• October 2025, new laws. The Governor signed a package of FAIR Plan bills (AB 226, AB 234, AB 290 and SB 525, with AB 1) giving the FAIR Plan new ways to finance claim payments, adding oversight and coverage for manufactured homes, and requiring the Department to consider additional home-hardening measures every five years.
• 2026, the Make It FAIR Act. AB 1680, introduced in February 2026 after a Department examination of the FAIR Plan, was among the bills the Governor signed in September 2026. The Department says it requires the FAIR Plan to carry out corrective actions from examinations and strengthens claims handling and financial accountability.

For a buyer, none of this changes today's quote. The reforms are aimed at making regular-market policies easier to find in fire country over time. Price a property on the coverage you can bind now.

Getting a policy, and getting off one

The FAIR Plan sells through brokers. Its how-to-apply page says a licensed broker can look for a regular insurer first and apply to the FAIR Plan if none will write the policy, that using a broker costs nothing extra, and that not every broker is registered with the FAIR Plan. Asking more than one broker is the plan's own advice.

Two programs can lower the bill or move you off the plan. The FAIR Plan offers discounts for wildfire mitigation on the home, the surrounding space and the community, and the Department notes the discount applies to the wildfire portion of the premium. Through its clearinghouse program, the FAIR Plan may share policy information with member insurers so they can offer a standard-market policy instead; policyholders can opt out.

How to check a home's fire hazard zone

CAL FIRE maps Fire Hazard Severity Zones in three classes, Moderate, High and Very High, as its published map service records them. The maps measure hazard from fuels, terrain and weather, not the risk to a particular house. CAL FIRE released new Local Responsibility Area maps in 2025, the first since 2011 (the State Responsibility Area maps were updated in 2024), and most San Diego County cities gained Very High land while a few, including the City of San Diego, lost some.

A sounding report looks up the parcel's point in CAL FIRE's Fire Hazard Severity Zone map service and prints the class it finds, or says the parcel is outside a mapped zone. The layers that service publishes are labeled with the 2007 State Responsibility Area and 2011 Local Responsibility Area map editions, which predate the 2024 and 2025 updates. Treat the report's class as a first check and confirm the current zone on CAL FIRE's own map before you rely on it. The wildfire insurance guide covers which parts of the county carry Very High zoning and what the zone does to a quote.

The report's insurance line is an estimate, a flat share of the price. It does not change with the fire zone and does not price a FAIR Plan or DIC policy, so in a High or Very High zone it can understate the real cost by a wide margin. No public source publishes a FAIR Plan plus DIC premium for a typical San Diego home, so this guide quotes none. Get a bound quote from a broker during your contingency period.

Common questions

Is the California FAIR Plan a state agency? No. The FAIR Plan says it is not a state agency or a public entity and has no public or taxpayer funding. It is a pool of every insurer licensed to write property insurance in California, created by statute in 1968 and regulated by the Department of Insurance.

What does a FAIR Plan dwelling policy cover? It is a named-peril policy covering fire and lightning, internal explosion, and smoke. Vandalism and malicious mischief can be added at extra cost. Water damage, theft, and liability are not included; a separate Difference in Conditions (DIC) policy from another insurer covers those.

What is the most a FAIR Plan policy will pay on a home? The Department of Insurance lists the residential limit as $3 million. Commercial policies go up to $20 million per building and $100 million per location. A licensed broker sets the actual limits on a policy.

Can I buy a FAIR Plan policy directly? The FAIR Plan directs applicants to a licensed broker registered with it. Its own representatives cannot advise on coverages or limits, and it says using a broker costs nothing extra.

Does the FAIR Plan share my information with other insurers? Through its clearinghouse program it may share policy information with member companies so they can offer you a standard-market policy instead. The FAIR Plan's clearinghouse page explains how to opt out.

Related reading

• Wildfire Insurance in San Diego
• Flood Zones and Flood Insurance in San Diego
• Closing Costs in San Diego
• Supplemental Tax Calculator