Sacramento, CA — The state’s home insurer of last resort, the California Fair Plan, has submitted a rate hike proposal to the California Insurance Commissioner.
It would increase rates by an average of 35.8%. Some areas in higher fire-prone areas could see a larger increase, and those in reduced risk regions could see a lower hike. If approved, it would take effect in April of next year.
The proposal will be reviewed by Insurance Commissioner Ricardo Lara and he could decide to reduce it. That’s what happened in 2023 when the Fair Plan requested a 48% average increase, but was only given 15.7%. The Fair Plan was allowed increases of 20% in 2019 and 16% in 2021.
The latest bump is primarily in response to the impacts of the winter wildfires in Los Angeles.
A spokesperson for the FAIR Plan argued that the rates must reflect the current risk portfolio, as more people are joining the plan of last resort, in response to insurance companies dropping customers.
