California’s insurer of last resort, the FAIR Plan, will receive a $1 billion bailout to cover damages from recent Los Angeles wildfires. This bailout will likely result in increased insurance premiums for homeowners as private insurers are allowed to pass costs onto their customers. State regulators approved the measure after the FAIR Plan indicated it would run out of funds due to significant payouts. This situation contributes to a worsening insurance crisis in California, prompting some major insurers to withdraw coverage or increase rates dramatically.
This situation could escalate the state's insurance crisis and convince more insurers to leave.
The FAIR Plan said it was set to run out of money by the end of March as losses piled up from the Palisades and Eaton fires.
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