Scant “UNFAIR Plan” Policy is the Most Insurers Would Have to Sell 

Los Angeles, CA – In a consumer alert video released today Consumer Watchdog warns that a low-benefit, high-cost, FAIR Plan-like policy is the best homeowners can hope to get from Insurance Commissioner Ricardo Lara’s deal with the insurance industry.

Consumer Watchdog Executive Director Carmen Balber says in the video: “California Insurance Commissioner Ricardo Lara cut a deal with the insurance industry, one that he says will get them selling more home insurance in California. But internal documents Consumer Watchdog obtained under the Public Records Act show that the deal is a Bait and Switch on consumers that won’t get a single new homeowner covered.”

Watch the video “Consumer Alert: Commissioner Lara’s UNFAIR Home Insurance Deal”

Insurance Commissioner Ricardo Lara announced a plan in September that would give insurance companies the deregulation they want in return for a “commitment” by insurance companies to start selling in risky parts of California again. 

However, documents uncovered by Consumer Watchdog reveal that insurers would be allowed to meet their commitment by offering the same high cost, limited benefit coverage that homeowners are already guaranteed access to in the FAIR Plan today. The documents contain the text of the plan Lara negotiated in August that was the basis for his September agreement with the insurance industry. 

Commissioner Lara testified before an Assembly Insurance Committee oversight hearing yesterday afternoon but did not disclose the type of policy insurance companies would be allowed to offer.

The consumer alert video asks, “Why is that bad?” The answer:

“FAIR Plan policies cover so little that homeowners have to buy a second insurance policy to fill in the gaps. 

“What’s missing from a FAIR Plan policy?

“Standard home insurance and the FAIR Plan both cover things like fire, smoke and lightning damage. But to add things like windstorm, hail and vandalism, you’ll have to pay the FAIR Plan extra. All these things are included in the price of a standard policy. And the FAIR Plan doesn’t even offer many things that most people expect from their home insurance. That includes theft, falling trees, the weight of snow and ice, non-flood water damage, glass breakage, liability, and the list goes on.

“Commissioner Lara is giving the insurance industry everything it wants in return for a false promise to start selling in California again.”

The Consumer Alert ends with a call for real solutions: A mandate that insurance companies cover Californians who meet state-mandated guidelines for home-hardening and brush clearance to protect their homes from wildfires. 

Read more about the loopholes in the Commissioner’s plan.