The California Fair Plan (CFP) is a state-run insurance program that provides coverage for homeowners unable to obtain insurance through the traditional market. California Fair Plan policies are designed to serve as a “plan of last resort” for high-risk properties that other insurance companies may have rejected due to the property’s fire line, claim history, or physical condition.
CFP policies are standardized and offer limited coverage compared to standard homeowners insurance policies. They typically include perils like fire, lighting, internal explosion, and vandalism. CFP policies may also have additional coverage for certain losses like smoke damage to the home due to fires.
CFP policies are typically more expensive than standard homeowners insurance policies due to the higher risk associated with the insured properties. However, they are an essential option for homeowners who may not be able to obtain coverage through other means. It is vital for homeowners to carefully review the terms and conditions of their CFP policy to understand their coverage. The California Fair Plan recommends getting a second policy (Difference in Condition Policy) to cover perils like water, liability, medical payments, and theft of personal property, among others, to avoid gaps in insurance.