FAIR Plan calls itself insurer of last resort as Topanga residents press solvency and coverage questions

At a Saturday workshop in Topanga, Peter Irwin, broker liaison for the California FAIR Plan, told residents the FAIR Plan exists as “the insurer of last resort” for property owners who cannot obtain coverage in the voluntary market.

Irwin said the FAIR Plan is a private, not‑for‑profit residual market created by statute in 1968 and backed by California property and casualty insurers. “Our goal is to not be needed,” he said, adding that the plan is intended as a temporary safety net until the voluntary market returns.

The FAIR Plan currently sets the total insured value (TIV) for a dwelling policy at $3 million and recently expanded commercial coverage to $20 million per location. Irwin said those limits were raised in response to market demand, particularly from homeowners associations and condo associations with few private options.

Residents pressed Irwin on whether the FAIR Plan has the funds to pay claims from the recent fires. Irwin said the plan collects premiums and uses actuarially based rates, reinsurance and other mechanisms to meet obligations. He told the group the FAIR Plan has exercised mechanisms in the past “to continue to pay claims,” and that private insurers and other statutory mechanisms are designed to backstop large losses.

Attendees and other speakers described additional pathways that can be used if losses exceed the plan’s reserves, including assessments on private insurers, reinsurance and a recent legislative change that allows the FAIR Plan to access capital markets in some circumstances. Irwin said those mechanisms make the FAIR Plan a viable option “because nothing else is available right now.”

Irwin encouraged homeowners in high‑risk areas to pursue risk‑reduction measures and to review coverage amounts with a broker. He provided the FAIR Plan website (www.cfpnet.com) and a contact number and email for follow‑up.

Why this matters: Thousands of homeowners in wildfire‑affected parts of California rely on the FAIR Plan when other insurers will not write policies. The program’s coverage limits and funding mechanisms determine whether policyholders can obtain full rebuild payouts or face gaps in settlement amounts.

Irwin's remarks reflect the FAIR Plan’s stated role as a stopgap for homeowners who cannot obtain private coverage. He repeatedly emphasized that the plan is not intended to be a long‑term replacement for a competitive private market and that restoring the private market is the preferred long‑term outcome.

For homeowners considering coverage changes, Irwin recommended an annual review with a broker, checking that the policy’s replacement‑cost options are selected where appropriate, and verifying mortgagee and billing information well ahead of renewal dates to avoid inadvertent cancellations.

Contact and resources: FAIR Plan materials and claims guidance are available at www.cfpnet.com. Irwin left a contact phone number (213‑529‑8128) and an email (perwin@cfpnet.com) for follow‑up questions.