How Does California FAIR Plan Insurance Work?

Updated Sep 15, 2023

The California FAIR Plan offers property insurance to homeowners and renters who have trouble getting insurance through a private company.

It's free, simple and secure.

California's FAIR Plan only covers a few types of damage, like fire and smoke. You can add coverage for windstorms, vandalism and other common types of damage.

But CA FAIR doesn't offer protection against water damage, and you can only insure your home and personal property for a combined maximum of $3 million. That may not be enough coverage if you have an expensive home.

You can apply for California FAIR insurance yourself or through an agent. But using an agent is typically faster, and there's no additional fee.

Who's eligible for California's FAIR Plan?
What does the FAIR Plan cover?

What's not covered?
How to get a CA FAIR quote

Who's eligible for California's FAIR Plan?

To get home insurance through the California FAIR Plan, you must own property in California.

Your home must also meet specific building requirements.

California FAIR doesn't require you to show proof that you can't get coverage from a private company. But homeowners should look for insurance from a private company before buying a FAIR Plan. This is because California's FAIR Plan covers fewer types of damage than home insurance from a private company. It also has lower coverage limits.

For example, the CA FAIR Plan doesn't cover water damage. Most basic home insurance policies from private companies include coverage for water damage.

What does the FAIR Plan cover?

The California FAIR Plan offers home insurance, renters insurance and condo insurance.

A FAIR homeowners insurance policy protects your house and personal property. Condo owners and renters can only get coverage for their personal property, not the dwelling itself.

California FAIR Plan coverage limits

You can get up to $3 million of combined coverage for your home and belongings from the California FAIR Plan.

Many homeowners don't need this much coverage. But it could be a problem for people with expensive homes.

Example

If your home costs $2 million to replace, you can only get a maximum of $1 million in personal property coverage.

California FAIR Plan coverage add-ons

You can also upgrade your coverage to include common add-ons like replacement cost coverage and protection for other structures.

The California FAIR Plan offers replacement cost coverage for your home and personal property. This increases your claim payout since FAIR won't consider age or wear and tear in the value of an item.

That means you'll have enough money to fix your home with brand-new parts or replace damaged things with new items.

Other structures coverage will pay to fix or replace a shed, a separate garage or other structures on your property.

Fair rental value coverage will pay you for lost income if damage prevents you from renting out your home.

Building code upgrade coverage will pay for any additional repairs or improvements required to get your home up to code after damage. This is also called ordinance and law coverage. The most FAIR will pay for these upgrades is 10% of your dwelling coverage.

This coverage can be beneficial if you own an older home. That's because you may need to upgrade its electrical or plumbing to meet current California requirements.

The California FAIR Plan offers earthquake insurance as a separate policy through the California Earthquake Authority (CEA).

Debris removal pays to clean up your property if a covered peril, like wind or fire, brings debris onto your property.

Inflation guard increases your dwelling coverage limit to cover changes in the costs of construction and materials caused by inflation. If you've added building code upgrade coverage, it will also apply to that limit.

Plants, shrubs and trees coverage pays to replace landscaping damaged by a covered event, like a fire. This coverage pays up to $250 per plant, shrub or tree.

The California FAIR Plan offers home insurance deductibles that range from $100 to $10,000. A higher deductible will lower your home insurance rates. But it's important to choose a deductible you can afford in an emergency when you may have other pressing expenses.

What damage is covered by the California FAIR Plan?

FAIR Plan property insurance will only pay for damage due to fire, lightning, smoke or an explosion inside your home.

This is sometimes called fire insurance, or "named peril" insurance.

You can also add on coverage for:

Windstorms
Hail
Explosions (external)
Vandalism or malicious mischief

Vehicular damage
Riots and civil commotion
Aircraft
Volcanic eruptions

What's not covered by the CA FAIR Plan?

The California FAIR Plan does not cover any water damage.

This is important to note because water damage is one of the most common causes of home insurance claims.

In addition, it doesn't cover:

Long-term vacant or unoccupied homes: If more than half of your home has been vacant or unoccupied for at least one year, you can't get a new insurance policy from FAIR or renew your current plan.

If your house is mostly vacant or unoccupied for less than a year, it must be in good condition. It also needs to have secured doors and windows to get FAIR coverage.
Houses with existing damage that are not under repair: If your house is damaged, you can only get coverage if you submit an agreement with a contractor with an outline of the repair details and an estimated completion date. This needs to be signed by you and a licensed independent contractor.
Properties used for illegal purposes: If illegal activity occurs on your property, it won't qualify for California's FAIR home insurance.

For instance, if you grow marijuana in your house, that's a violation of federal law. So, you can't get FAIR Plan coverage.

If you buy a California FAIR policy, you should also look for a "difference-in-conditions" policy.

These policies extend your limits for covered damage or provide coverage for additional situations. For instance, you can buy a difference-in-conditions policy that includes water damage.

How to get a California FAIR quote and payment options

You can apply directly or work with an insurance agent to get a California FAIR Plan fire insurance quote.

One benefit of using an agent is that you'll be able to get a quote right away.

The agent can also help you decide how much coverage you need. When you get a home insurance quote online from a private company, it will usually estimate how much coverage you need to protect your home. The FAIR Plan, on the other hand, won't help you determine how much coverage you need. But an agent can help you choose the correct coverage limits.

In addition, they can help you ensure all documents are accurate and no pieces of your application are missing.

In some cases, FAIR will need to inspect your property for risks. This may include determining how likely you are to have wildfire damage. The inspection will determine how much you pay for insurance.

Based on the inspection, you may be required to make safety improvements. Improvements may include buying fire extinguishers or clearing brush from your property.

Once you get a California FAIR Plan quote, you'll have 60 days to pay for your policy. You can pay for your California FAIR Plan by direct deposit from a checking or savings account (ACH payment), cash, check or money order. You cannot pay for coverage with a credit card.

Frequently asked questions

What is the FAIR Plan in California?

The California FAIR Plan offers property insurance to homeowners who can't find coverage from a private insurance company in California, like Travelers or Nationwide.

What does the California FAIR Plan cover?

The California FAIR Plan covers damage to your home and personal property due to fire, lightning, smoke and internal explosions. You can also add on extra coverage for damage due to windstorms, hail, vandalism and more.

What is the maximum limit for the California FAIR Plan?

California homeowners can get a maximum of $3 million of combined coverage for their home and belongings. If your home costs $2.5 million to rebuild, you can only get $500,000 of coverage for your personal property.

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