Department of Insurance to Join LACMA’s Fire Recovery Resource Fair
In a decisive move to ensure timely insurance payouts for Southern California wildfire survivors, California Insurance Commissioner Ricardo Lara has directed the state’s FAIR Plan to maintain its financial stability while expediting claims processing. The Department of Insurance will be present at the Los Angeles County Medical Association (LACMA) Fire Recovery Resource Fair, providing critical information and assistance to physicians and their patients affected by the recent wildfires.
The FAIR Plan, which serves as the insurer of last resort for homeowners unable to secure coverage in high-risk areas, has been ordered to swiftly pay claims while shoring up its financial reserves. To do so, Commissioner Lara has approved a $1 billion assessment on member insurance companies, ensuring the FAIR Plan meets its obligations to wildfire survivors without shifting the burden onto consumers.
Key Consumer Protections Ordered:
• Increased Claims Processing Capacity: The FAIR Plan must hire additional staff to process claims fairly and efficiently.
• Use of Available Funds: Before assessing insurers, the FAIR Plan is required to utilize its reserves and reinsurance funds.
• Consumer Cost Protections: Under last year’s agreement, insurance companies are responsible for covering half of the assessment, and any temporary fee to policyholders requires prior approval under Proposition 103.
• Fair Plan Reserve Fund Strengthening: As California prepares for another wildfire season, maintaining a strong reserve is essential.
• Compliance with Insurance Laws: The FAIR Plan must offer advance payments for living expenses and personal property losses without requiring an inventory—aligning its policies with other insurance companies.
Commissioner Lara’s actions are part of his Sustainable Insurance Strategy, the most significant insurance reform in 30 years, aimed at reducing reliance on the FAIR Plan by increasing the availability of private insurance policies in wildfire-prone regions.
“These fires are not a new crisis—they are a recurring reality. We must move people away from the FAIR Plan and increase insurance options under the Sustainable Insurance Strategy I finalized last year,” said Commissioner Lara. “Wildfire survivors can’t afford delays or bureaucratic hurdles. My order ensures they receive the compensation they are owed, just as they would from any other insurer.”
The need for insurance reform is underscored by history. The last major FAIR Plan assessments followed the devastating 1993 Kinneloa Fire in Altadena and the Old Topanga Fire in Malibu and Topanga, which together claimed three lives and destroyed nearly 550 structures. Adjusted for inflation, those past assessments would amount to $563 million today—highlighting the financial risks of an outdated system.
As part of ongoing reforms, the Department of Insurance will soon publish a Report of Examination on the FAIR Plan’s financial standing and compliance with key operational recommendations. This includes improvements to governance, risk management, underwriting, and claims processing. Commissioner Lara also reiterated his support for legislation that would grant the FAIR Plan access to credit lines and catastrophe bonds, ensuring better financial preparedness for future disasters.
LACMA’s Fire Recovery Resource Fair: Helping Physicians and Their Patients
With many Los Angeles-area physicians impacted by wildfires—either personally or through their patient communities—LACMA is hosting a Fire Recovery Resource Fair on February 23 to provide direct support, guidance, and resources. The California Department of Insurance will be present at the event, offering assistance with insurance claims and coverage questions.
Physicians and community members are invited to attend at no charge to learn about available resources, from navigating insurance claims to accessing emergency financial assistance.
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