Cal Fair Plan not paying my full insured amount Christina Orlossy asked 2 years ago
Cal Fair Plan not paying my full insured amount

We were underinsured due to having to switch from a private insurance to the California Fair Plan. We were paying extremely high premiums so had to reduce coverage to afford the premium. Our home and all belongings were completely destroyed in the Oak Fire and the Cal Fair Plan is undervaluing rebuild estimates and they are stating that I have to pay out of pocket and then get reimbursed for actual dollar amount differences. They are paying us $100,000+ less than what we were insured for, and are saying we have to carry the burden of paying the $100,000+ out of pocket and wait for reimbursement. This seems grossly unfair and maybe illegal. I have provided estimates from contractors and was able to get copies of some of the receipts for recent upgrades.

Advice on how to handle this situation is greatly appreciated!

1 Answers
Karl Susman Karl Susman Expert answered 2 years ago
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Hi Christina,

I’m so sorry you lost your home. Most insurance companies will pay you a reduced amount, sometimes known as ACV or Actual Cash Value until the items are repurchased, then they will put up to the difference in the policy limit for replacement cost. This is done to ensure replacement is done, since cashing out would only provide a lower limit. As for being underinsured, again, unfortunately, California FAIR Plan has maximum limits and if you are insuring for the maximum limit and still underinsured, then it is possible that less than the policy limit will be paid out as well. Sadly, I wish I had better news for you.

If I can assist you, don’t hesitate to reach out.

Karl Susman