In response to the devastating January firestorms in Los Angeles, California lawmakers are advancing legislation (AB 226) to secure the state's high-risk home insurance program, the FAIR Plan. This bill proposes that the FAIR Plan become eligible for loans and bonds, allowing it to manage financial strain after disasters more effectively. Last year's similar proposal failed to pass the Senate, leading to insurers imposing an additional $1 billion in assessments to cover claims. If enacted, AB 226 could help alleviate rising costs for homeowners and streamline disaster claims processes, ultimately shielding consumers from financial burdens.
Assemblymember David A. Alvarez highlighted that if his proposed bill, AB 226, had been passed earlier, the FAIR Plan could have mitigated excessive price increases for consumers after the wildfire claims.
The introduction of AB 226 aims to allow the FAIR Plan to access much-needed financial resources to handle the aftermath of disasters more effectively, preventing future financial crises.
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