Commissioner Lara and the FAIR Plan have reached an agreement to increase the commercial coverage limit to $20 million, more than doubling the existing limit for California businesses!
Insurance rates and availability in California have increasingly been the subject of many heated conversations and left many businesses struggling for alternatives. Last July, Insurance Commissioner Ricardo Lara held an investigatory hearing into the FAIR Plan during which our association, our members, and countless other groups and businesses, had the opportunity to share their stories and advocate the need for change.
The California FAIR Plan was never intended to be the first choice for home or business owners, but rather was developed to provide insurance to those who have been unable to secure a policy through traditional carrier. However, as risks of wildfires and flooding have increased over recent years, many traditional carriers have chosen to exit the California Market, or increase premiums to unreasonable rates, leaving no other choice but to turn to the FAIR Plan, which unfortunately comes with its own set of hurdles. One of the largest issues when it comes to the FAIR Plan is that while commercial property values and coverage needs are continuously increasing, the FAIR Plan’s commercial limits had not been adjusted in more that two decades.
The new agreement signed March 29th by Commissioner Lara and FAIR Plan President Victoria Roach will increase the combined coverage limits for the FAIR Plan, under its Division I Commercial Property Program, from $8.4 million to $20 million per location and, under its Division II Businessowners Program, from $7.2 million to $20 million per location.
For more information on this agreement, please check out the full press release here.
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