California’s FAIR Plan Gets $1 Billion Bailout After L.A. Fires
Published On Feb 11, 2025, 6:09 PM
California's home insurance program, the FAIR Plan, is facing a financial crisis due to a lack of funds to cover claims from recent wildfires. To remedy this, regulators have approved a $1 billion payment from private insurers to the FAIR Plan, which is expected to raise homeowners' insurance costs across the state. This situation exacerbates an already challenging insurance market, as more insurers may retract from California due to increasing losses related to wildfires, further complicating homeowners' ability to secure coverage.
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The insurance market in California is under significant strain, leading to potentially higher insurance costs and reduced coverage availability. This situation might drive investors towards insurance companies poised for growth or stability despite the increased pressures on the market. Companies with a strong financial basis may be well-positioned to absorb these costs.
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