California is seeking $1 billion to support its Fire Adapted Insurance Exchange (FAIR) plan, a move that highlights the struggles faced by insurers in the state. This comes as industry analysts predict a $35 billion loss due to rising costs and shrinking coverage.
The FAIR plan, which aims to provide affordable insurance options for wildfire-prone areas, faces challenges in its own right. Insurers are grappling with increasing losses and volatile markets, making it difficult for them to offer stable coverage at competitive rates.
The industry’s concerns are compounded by the fact that California’s insurance market is facing a perfect storm of rising costs, shrinking coverage, and limited capacity to absorb losses. As insurers struggle to stay afloat, policymakers must find ways to balance affordability with risk management.
With wildfires becoming increasingly frequent and destructive, it’s essential for California to address its insurance challenges head-on. The state’s $1 billion FAIR plan is a crucial step in this direction, but more needs to be done to support insurers and ensure that Californians have access to affordable coverage.
Source: https://www.reuters.com/world/us/californias-1-billion-la-wildfire-bill-highlights-insurers-struggle-analysts-say-2025-02-12