California regulator will broaden insurance of last resort

California Insurance Commissioner Ricardo Lara will release more information on the state's FAIR Plan home insurance of last resort on July 1.

Ricardo Lara, California Insurance Commissioner.

The information will include total exposures, policy counts, financial data and more, according to a news release from the commissioner's office.

The state's regulator also plans to temporarily expand FAIR Plan coverage for high-value commercial properties, homeowners associations and affordable housing developments, starting July 26. High-value commercial coverage will offer limits up to $20 million for each building, up to a maximum of $100 million per location. The coverage will sunset in 2028.

In addition, the news release said the commissioner demands that the FAIR Plan hire more staff, improve claims processes and shift costs away from consumers. The commissioner on June 12 announced a probe of State Farm about its handling of claims from the January L.A. wildfires, including smoke damage claims.

In a related development, the California Department of Insurance answered a lawsuit brought by Consumer Watchdog in April, in Los Angeles Superior Court. The suit seeks to stop the FAIR Plan from passing on the costs of the January fires to policyholders. The department's demurrer filing seeks dismissal of the suit because it doesn't meet a legal standard for "cause of action." The department's filing also asserts that the commissioner has the authority under Proposition 103 to allow insurers who are members of the FAIR Plan may assess fees to recoup these costs.