Lara Responds to FAIR Plan Continuation Regarding Improved Homeowners Policing Order

Share this article:

Insurance Commissioner Ricardo Lara responded to the California FAIR Plan Association lawsuit challenging Lara’s recent order ordering the plaintiff to offer a home insurance policy covering water damage, theft and loss of use in addition damage from the current home fire, saying the group puts profits before consumer needs.

In the lawsuit filed in Los Angeles Superior Court on Thursday, the Fair Plan says the Sept. 24 order is “the commissioner’s attempt to require the FAIR Plan to sell its new home insurance policy is against the law. explicit objectives underlying the FAIR Plan Act to ensure stability. in the property insurance market for property located in the State of California.

Lara’s office refuted the claims in a statement on Sunday.

“The insurance industry that manages the FAIR plan is once again putting its profits before the needs of California consumers,” the statement said. “Forcing its policyholders to purchase separate liability and content insurance policies, often from the same insurance companies that gave up coverage in the first place, only increases the price for consumers.”

The goal of the FAIR plan is to take all comers and Lara believes it “is not achieving its goal and mission to be there for consumers when they need it most,” according to the statement, which further stated that Lara “will not let go until Californians have the coverage options they need.

But according to the FAIR plan lawsuit, in issuing her order, Lara “did not take into account the significant costs that would be incurred by the FAIR plan in having to comply with this order and the harm that would result to FAIR plan customers,” FAIR plan employees and the insurance industry.

The FAIR plan asks a judge to order Lara to cancel her order.

The FAIR Plan is a joint association formed by insurers authorized to take out basic property insurance. Lara’s order directs the FAIR plan to submit a revised plan of operations to the Insurance Department within 30 days.

Lara’s directive will give approximately 200,000 Californians who currently rely on the FAIR plan to protect their homes a more comprehensive option on top of the minimum coverage the FAIR plan currently offers on Monday, according to a statement from Lara’s office.

In addition, requiring the FAIR plan to offer a more comprehensive home insurance policy “will prevent consumers from having to purchase a second supplemental insurance policy to cover other risks such as property civil liability, property damage. ‘water and theft,’ according to Lara’s office.

But according to the lawsuit, requiring the FAIR plan to offer the specified type of home insurance policy will “have a serious impact and destabilize the normal insurance market for full (basic) home insurance policies.”

The FAIR plan will not act as the market of last resort, but rather as a competitor who offers a home insurance policy with less coverage than would be available in the voluntary market, the lawsuit alleges.

“All other things being equal, California customers will be encouraged to take out the Commissioner’s new home insurance policy … which will destabilize the property insurance market,” the lawsuit said.

The order is also “irrational” in that it is geographically unlimited as the policies will be available for sale in areas unaffected by forest fires and in which there is no need for registration. alternative to the FAIR plan, indicates the pursuit.

Lara Responds to FAIR Plan Continuation Regarding Improved Homeowners Policing Order was last modified: October 18, 2021 through Contributing editor

>> Want to read more stories like this? Receive our free daily newsletters here!

Follow us:


About Leah Albert

Check Also

Continue or heal? Suspension of swap payments following an event of default may not be unlimited | Hogan Lovells

Background The decision of the High Court (The joint administrators of Lehman Brothers International (Europe) …

Leave a Reply

Your email address will not be published.