The California FAIR Plan, crucial for homeowners unable to obtain fire insurance, faces significant financial challenges after the recent wildfires in Los Angeles County. Covering 22% of properties in the Palisades Fire zone and 12% in Eaton, the plan's potential exposure amounts to over $4.8 billion. It must pay $900 million in claims before relying on re-insurance, which could leave it liable for any losses beyond $5.78 billion. Details about its financial reserves are unclear, raising concerns about its ability to handle these substantial claims effectively.
The California FAIR Plan, as the insurer of last resort, covers many high-risk properties but may struggle financially after the Los Angeles wildfires.
With potential claims from the Palisades and Eaton fires surpassing billions, the FAIR Plan's capacity to meet these obligations remains uncertain.
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