The state of the fair plan and those who run the program didnt exactly have good news. The fair plan continues to grow in size as consumers find themselves without coverage. As a result, we have doubled in size in the last three years. Reporter by law every insurer operating in the state has to participate in the fair plan, but if losses exceed the plans funding, the rest must be made up by the Insurance Companies who will pass it on to consumers as a surcharge. Insurance broker carl sussmann says the size of the fair plan now makes that inevitable. Fair plan has about 300 billion in total exposure, meaning how much they actually insure, and about 200 million in the bank. Its not hard to see that in the event of a large, catastrophic event they wont have the funds to be able to pay for it. For Many Companies this financial burden will be too great and they may result in them pulling out and no longer writing insurance in the state. Reporter thats already happening. State farm Just Anno
New policies in california. Other insurers including allstate, farmers, nationwide and others are taking similar actions, citing high cost and the threat of wildfires, a growing number of Property Owners are turning to the states socalled fair plan. As john ramos shows us with demand growing, the states last insurance option could be one major disaster away from imploding. Reporter the california fair plan was created in 1968 as a place for people to get Fire Insurance when no one else would offer it to them. Now, with climate change, so many people entered the program that just one major wildfire could wipe out every last dollar in the program. Reporter catastrophic wildfires turned areas never seen as high risk into places where Fire Insurance is not even available. Sacramento is beginning to see the scope of the problem. Last week the California Department of insurance held a hearing about the state of the fair plan. Those who run the program did not exactly have good news. The fair
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