LAKE TAHOE, Calif./Nev. – Cal FAIR, the last-resort insurance program for fire coverage, is looking for a rate hike averaging a little below 36% from the state insurance department. This rate hike would result in an increase for Tahoe and Truckee policyholders, as much as 50% in some areas–which some would argue is anything but fair.
The FAIR Plan is a state-created and privately-run insurance pool that is required to offer coverage to those who cannot get it on the regular market. Their board has representatives from some of the major insurers in California. But the policy only covers fire damage, meaning that policyholders must seek out a second policy for other generally covered damages. According to the Department of Insurance, two-thirds of FAIR Plan policy holders bought a secondary policy in 2023.
Insurance Commissioner Ricardo Lara implemented reforms at the beginning of the year that allowed for these rate increase requests. One of them was a wildfire catastrophe model, which could be used to capture current and future risk rather than past risk through historical data…