Everything California Homeowners Need to Know About the California FAIR Plan

Non-Renewed? Buying a Home in a Wildfire Area? Need Insurance to Close Escrow?

If you’ve recently received a homeowners insurance non-renewal notice, been declined by multiple insurance companies, or are buying a home in a high wildfire or brush area, you’re not alone.

California’s home insurance market has changed dramatically over the past several years. Many insurance companies have reduced or stopped writing policies in wildfire-prone areas, leaving thousands of homeowners searching for coverage.

Fortunately, the California FAIR Plan provides an insurance solution for homeowners who cannot obtain traditional homeowners insurance.

At Starwest Insurance Services, we’ve specialized in helping California homeowners since 1995. We compare admitted carriers first, and when necessary, we help homeowners obtain California FAIR Plan coverage combined with a Difference in Conditions (DIC) policy to provide more complete protection.

California FAIR Plan at a Glance

✅ California’s insurer of last resort

✅ Designed for homeowners unable to obtain traditional homeowners insurance

✅ Covers fire and wildfire

✅ Residential coverage available up to $3,000,000 combined

✅ Usually paired with a Difference in Conditions (DIC) policy

✅ Helps satisfy most mortgage lender insurance requirements

✅ Fast turnaround for escrow closings

What Is the California FAIR Plan?

The California FAIR Plan (Fair Access to Insurance Requirements Plan) is a state-mandated insurance association created to provide basic property insurance for homeowners who are unable to obtain coverage through the traditional insurance market.

It is often referred to as California’s “insurer of last resort.”

Unlike a traditional homeowners insurance policy, the FAIR Plan primarily provides protection against fire and wildfire losses, making it an essential option for homes located in wildfire-prone or high brush-risk areas.

Who Needs a California FAIR Plan?

You may qualify if:

• Your homeowners insurance was non-renewed
• You’ve been declined by multiple insurance companies
• Your home is located in a wildfire or brush area
• You’re buying a home and cannot obtain homeowners insurance
• Your property has a high wildfire risk score
• You own a mountain, canyon, rural, or heavily wooded property
• You need insurance quickly to close escrow

If any of these situations apply to you, the California FAIR Plan may provide the coverage needed to protect your home and satisfy your lender’s insurance requirements.

What Does the California FAIR Plan Cover?

The California FAIR Plan provides basic property insurance, including coverage for:

• ✅ Fire
• ✅ Wildfire
• ✅ Smoke
• ✅ Lightning
• ✅ Internal Explosion

Optional endorsements may also provide coverage for:

• Windstorm
• Hail
• Riot
• Aircraft
• Vehicle Damage
• Volcanic Eruption
• Vandalism & Malicious Mischief

What Isn’t Covered?

A California FAIR Plan policy is not a complete homeowners insurance policy.

It generally does not include:

❌ Water Damage

❌ Theft

❌ Personal Liability

❌ Medical Payments

❌ Personal Injury

❌ Sewer Backup

❌ Equipment Breakdown

❌ Identity Theft

❌ Many of the broad protections found in a standard HO-3 homeowners policy

This is why most homeowners purchase a Difference in Conditions (DIC) policy.

California FAIR Plan vs. Standard Homeowners Insurance

Coverage	Standard Homeowners	California FAIR Plan
Fire	✅	✅
Wildfire	✅	✅
Smoke	✅	✅
Theft	✅	❌
Water Damage	✅	❌
Personal Liability	✅	❌
Personal Property	✅	Limited
Loss of Use	✅	Limited
Wind/Hail	✅	Optional
Earthquake	Optional	❌
Flood	❌	❌

Why Do You Need Two Policies?

One of the biggest misconceptions about the California FAIR Plan is that it provides complete homeowners insurance.

It doesn’t.

Most homeowners purchase two policies that work together.

Policy #1

California FAIR Plan

Provides:

• Fire
• Wildfire
• Smoke
• Lightning
• Basic Property Coverage

Policy #2

Difference in Conditions (DIC)

Provides:

• Water Damage
• Theft
• Personal Liability
• Personal Property
• Additional Living Expenses
• Loss of Use
• Many additional homeowners coverages

Together, these two policies provide protection that closely resembles a traditional homeowners insurance policy.

How Much Does the California FAIR Plan Cost?

There isn’t a flat rate.

Your premium depends on several factors, including:

• Wildfire Risk
• Home Replacement Cost
• ZIP Code
• Construction Type
• Roof Age
• Defensible Space
• Claims History
• Coverage Limits
• Deductible

Homes located in higher wildfire risk areas generally pay higher premiums than homes located in lower-risk areas.

Maximum California FAIR Plan Coverage

The California FAIR Plan currently provides up to $3,000,000 in combined residential coverage at a single location.

This combined limit includes:

• Dwelling
• Other Structures
• Personal Property
• Other Covered Residential Property

If your home’s replacement cost exceeds $3 million, our agency can help you explore additional insurance solutions.

Buying a Home? Need Insurance Fast?

Many California homebuyers discover during escrow that traditional insurance companies will not insure the property.

We help buyers obtain:

• California FAIR Plan
• Difference in Conditions (DIC) Policy
• Mortgagee Clause
• Insurance Binder
• Evidence of Insurance
• Same-Day Service (when available)

Helping buyers close escrow on time is one of our specialties.

Our California FAIR Plan Process

Step 1

Free consultation

Step 2

Shop admitted insurance companies

Step 3

Determine FAIR Plan eligibility

Step 4

Compare Difference in Conditions (DIC) policies

Step 5

Issue your policies

Step 6

Send insurance documents directly to your lender or escrow company

Frequently Asked Questions

Why can’t I get regular homeowners insurance anymore?

Many insurance companies have reduced or stopped writing policies in California’s wildfire-prone areas due to increased wildfire losses, rising rebuilding costs, stricter underwriting guidelines, and changes in the California insurance market. If you’ve been non-renewed or declined by multiple companies, the California FAIR Plan may provide the protection you need.

Does the California FAIR Plan cover wildfire?

Yes. Wildfire is considered a covered fire loss under the California FAIR Plan.

Does the California FAIR Plan cover theft?

No. Theft is not covered under the standard California FAIR Plan policy. A companion DIC policy is typically recommended.

Does the California FAIR Plan cover water damage?

Generally, no. Water damage is one of the largest coverage gaps. Most homeowners purchase a Difference in Conditions (DIC) policy to obtain this protection.

Does the California FAIR Plan include personal liability coverage?

No. Personal liability protection is not included in a California FAIR Plan policy.

Why do I need a Difference in Conditions (DIC) policy?

A DIC policy fills many of the FAIR Plan’s largest coverage gaps, including:

• Water Damage
• Theft
• Personal Liability
• Personal Property
• Additional Living Expenses
• Loss of Use

Together, the FAIR Plan and DIC policy provide much broader homeowners protection.

How much does the California FAIR Plan cost?

Premiums depend on your home’s location, wildfire risk, construction type, replacement cost, roof age, claims history, deductible, and other underwriting factors.

What is the maximum coverage available?

The California FAIR Plan currently provides up to $3,000,000 in combined residential coverage at a single location.

Can I buy a FAIR Plan policy when purchasing a home?

Yes. Many homebuyers rely on the FAIR Plan when purchasing homes in wildfire-prone or brush areas where traditional insurance is unavailable.

Will my mortgage company accept a FAIR Plan policy?

Usually yes. Most mortgage companies accept FAIR Plan coverage, although many also require a companion DIC policy.

Can I switch back to regular homeowners insurance later?

Yes. Many homeowners eventually return to traditional insurance if market conditions improve or their property becomes eligible again.

Is the California FAIR Plan more expensive?

Often yes. Since it insures higher-risk properties, premiums are generally higher while coverage is more limited than a traditional homeowners policy.

Does the California FAIR Plan cover earthquakes?

No. Earthquake insurance must be purchased separately.

Does the California FAIR Plan cover flood damage?

No. Flood insurance requires a separate flood insurance policy.

Can I insure a rental property?

Yes. Rental properties, vacation homes, and certain commercial properties may qualify.

Can I buy the California FAIR Plan directly?

Most homeowners purchase the California FAIR Plan through a licensed insurance broker who can also help secure the appropriate DIC policy.

How many insurance companies have to decline me before I qualify?

There is no specific number of declinations required. Your insurance broker will determine whether the FAIR Plan is the best available option after reviewing the traditional insurance market.

Can I improve my chances of qualifying for regular homeowners insurance again?

Possibly. Home-hardening improvements may improve eligibility with some insurance companies, including:

• Creating defensible space
• Trimming trees
• Removing dead vegetation
• Installing a Class A roof
• Ember-resistant vents
• Updating electrical systems
• Updating plumbing
• Completing wildfire mitigation improvements

Why Homeowners Choose Starwest Insurance Services

✔ Serving California Since 1995

✔ No Broker Fees

✔ California FAIR Plan Specialists

✔ Difference in Conditions (DIC) Experts

✔ Access to Admitted & Non-Admitted Markets

✔ Fast Escrow Closings

✔ Luxury Home & Brush Area Specialists

✔ Personalized Service from Licensed California Insurance Professionals

Contact Starwest Insurance Services

Westminster Office

9039 Bolsa Ave., Suite 218

Westminster, CA 92683

Irvine Financial Center

7700 Irvine Center Drive, Suite 800

Irvine, CA 92618

Phone: (714) 799-8892

Email: james@starwestinsurance.com

Website: www.starwestinsurance.com

Need a California FAIR Plan Quote?

Whether you’ve been non-renewed, declined by multiple insurance companies, or need homeowners insurance before closing escrow, Starwest Insurance Services is here to help.

Our experienced team will first shop traditional insurance companies. If standard coverage isn’t available, we’ll help you secure the right California FAIR Plan and Difference in Conditions (DIC) policy to protect your home, satisfy your lender, and give you peace of mind.

Call us today at (714) 799-8892 or request your free California FAIR Plan quote online.