What you need to know about the CA Fair Plan

The California Fair Access to Insurance Requirements (FAIR) Plan is a state-run program that provides essential property insurance coverage for commercial property owners who cannot obtain insurance in the preferred or even the non-standard insurance market. The plan was established to ensure that all Californian business and commercial property owners have access to basic fire insurance coverage, regardless of their location or risk level.

For commercial property owners, the importance of the CA Fair Plan lies in the fact that it provides coverage for property damage caused by a?fire. This is particularly important for commercial property owners who operate in areas that are prone to wildfire, high-risk operations, or have a minimum predicted loss that equals a total loss.

Without access to the CA Fair Plan, commercial property owners may be unable to obtain insurance coverage for their properties. This could leave them vulnerable to financial losses resulting from property damage or destruction, which could have a significant impact on their business operations and long-term success.

The CA Fair Plan is an essential resource for commercial property owners who may be unable to obtain insurance coverage in the standard insurance market. It is also essential to the insurance marketplace and prevents insurance companies from becoming insolvent by saving them from losses that would otherwise deplete their claims reserves.?

However, when getting a California Fair Plan for commercial property, the difference in condition insurance is critically important, but often forgotten. The California Fair Plan provides basic fire and property insurance. Most peril coverages are limited and the plan does even not cover all perils.

The difference in condition insurance (DIC) is an additional insurance policy that can be purchased to supplement the coverage provided by the California Fair Plan. DIC coverage can help fill in the gaps left by the Fair Plan's limited coverage, offering protection against perils that are not covered by the basic policy. Examples are wind, liability, and business interruption.?

It's important to note that DIC insurance is not a replacement for the basic fire coverage provided by the California Fair Plan. Instead, it is an additional policy that provides enhanced coverage for perils not covered by the basic policy.

Commercial property owners should carefully evaluate their insurance needs with their insurance broker and purchase DIC insurance to supplement their California Fair Plan coverage. Without it, they may be exposed to significant financial losses in the event of an uncovered peril.

If you have questions or concerns please reach out to me.?

Sarmad Naqvi, CLCS

510-590-0635

[email protected]