Alive Insurance Provides Alternative to FAIR Plan in Orinda

Alive Insurance Provides Alternative to FAIR Plan in Orinda

| June 07, 2024



With the March 2024 news of California's largest insurer, State Farm, non-renewing 72,000 policies, and the biggest concentration in the city of Orinda, many are wondering if they will be next. We agree with much of the above report by Bay Area News, however, we disagree that the FAIR plan is always the only alternative. We are even more concerned after reading this breaking news, dated June 7, 2024: State Farm zigzags on California home policy non-renewals.

 

With 85% of the CA admitted market closed to new business, most assume their only option is the FAIR plan, otherwise known as the last resort for homeowners insurance. The FAIR plan covers little else besides fire, and it can be difficult in this market to find a secondary policy known as a "DIC" (Differences in Condition), or "wrap" policy, to cover what the FAIR plan does not, such as liability, water, and theft. The FAIR plan is run by the state, and is secured by the admitted carriers.  The FAIR plan recently admitted that they are one major catastrophe away from insolvency.  We are concerned about the viability of the FAIR plan given their admission, and place more confidence in financially A-rated surplus carriers.  We are also more in favor of insureds having one homeowner policy over two.

Even though State Farm is offering this option of "renewing" the 72,000 non-renewed policies with the FAIR plan plus a DIC companion policy, we do NOT recommend this course of action.  Instead, get help from an independent agent in securing a non-admitted or surplus carrier policy as a more viable option to the FAIR plan. 

Click here to learn about The Difference Between Admitted and Non-admitted, aka Surplus Lines Insurance Companies.

While surplus lines policies may cost more than admitted carriers, and, potentially, the FAIR plan, they appear to have better financial strength than the FAIR plan.  They may not be backed by the state, but they don't have to comply with DOI regulations. Surplus carriers don't need DOI rate approval, and can charge a rate commensurate with their risk, thus keeping them in the marketplace. 

Alive Insurance has worked tirelessly to obtain appointments with several financially A-rated surplus carriers for all types of homes. For the best pricing, and the fewest exclusions, your home's major systems (roof, electrical, plumbing, and heating) will need to be updated.  Also, be aware, there may be a separate wildfire deductible, and limitations on water damage coverage.  

If you receive a non-renewal notice, contact your agent as soon as possible.  If you don't have a local agent, reach out to an independent agency for assistance. Please contact us if you have any questions.