What coverage is needed in addition to California Fair Plan? It looks like I am paying for some of the same coverages that I have with California Fair Plan fire with my Farmer’s Insurance Home owner policy. It’s costing over $700/mo. plus $8000+ per year for fire insurance. Pretty hard to maintain both on a fixed income.
Linda McIndoe asked 12 months ago 1 Answers
Hi Linda, FAIR plan is a last resort policy, meaning typically you cannot find other homeowners insurance for your area. The FAIR plan provides basis coverage and often people secure a ‘wrap around’ (also called Differences in Conditions) policy to fill the coverage gaps left by the FAIR plan.
FAIR Plan Coverage:
-Basic fire insurance coverage (“fire policy”)
-Typically only covers direct losses from fire, smoke, lightning, and internal explosion
-Usually a “named peril” policy, meaning it only covers specifically listed perils
-Does not include liability coverage
-Does not cover water damage, theft, vandalism, or other common homeowners perils
-Generally considered a “last resort” market for properties that can’t get standard insurance
Wrap-Around Policy (also called DIC or Difference in Conditions)…Typically includes:
-Personal liability coverage
-Water damage coverage
-Theft coverage
-Vandalism coverage
-Personal property coverage
-Additional living expenses
-Other perils not covered by FAIR Plan
Together, a FAIR Plan + wrap-around policy combination aims to provide coverage equivalent to a standard homeowners policy, but through two separate policies. This arrangement is typically more expensive than a standard homeowners policy but provides an option for property owners who cannot obtain traditional coverage.
You can forgo the DIC plan but you will be left exposed for some circumstances.
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