California Gov. Gavin Newsom has approved a package of bills reshaping the state’s FAIR Plan, the insurer of last resort. The measures add a financing mechanism, expand coverage to manufactured homes, and alter governance and consumer rules.
The kinds of climate-fueled firestorms like we saw in January will only continue to worsen over time. That’s why we’re taking action now to continue strengthening California’s insurance market to be more resilient in the face of the climate crisis.
Gavin Newsom, California Gov.
Assembly Bill 226, authored by Lisa Calderon, lets the FAIR Plan issue bonds or secure a line of credit to access capacity. She argued the tool spreads costs over time instead of triggering sudden assessments that drive up premiums.
Calderon also carried AB 234, which adds legislative leaders as nonvoting ex officio members of the FAIR Plan board, with the option to appoint alternates.
Consumer-facing changes arrive through AB 290. It requires an automatic payment system, creates a grace period for overdue installments, and blocks cancellations or nonrenewals tied to whether a customer uses autopay.
Another measure, AB 1, directs the California Department of Insurance to review regulations every five years and consider adding new building-hardening requirements tied to property and community mitigation.
Senate Bill 525, introduced by Senate Minority Leader Brian Jones, forces the FAIR Plan to cover manufactured and mobile homes under the same terms as standard dwellings, including full replacement coverage.
“There’s over 500,000 mobile homes in California and I’m just not comfortable leaving that many people out to dry when the worst happens,” Jones said after the bill cleared the Senate.
Insurance Commissioner Ricardo Lara called the legislative package a major step. “As we implement the largest regulatory changes in our market, the insurance company-run FAIR Plan must meet the challenge of addressing our insurance crisis,” he said, adding that while regulators push carriers to write in the private market, the FAIR Plan must provide essential backup to homeowners.
