California Increases Commercial Coverage Limits for FAIR Plan: A Boost for Businesses in 2023

19 July 2023
California Increases Commercial Coverage Limits for FAIR Plan A Boost for Businesses in 2023

In a significant development for businesses in California, the California FAIR (Fair Access to Insurance Requirements) Plan has announced an increase in its coverage limits. This adjustment marks a crucial step towards addressing the challenges faced by the commercial coverage market in the state. This article will delve into the recent changes, outlining the maximum coverage limits, the extended coverages offered by the FAIR Plan, as well as the areas it does not cover.

Maximizing Coverage: The New Limits

Under the leadership of Commissioner Lara, the FAIR Plan has decided to raise its coverage limits for businesses in California. This adjustment brings a much-needed change, as the previous limits had not been updated for over two decades. The new coverage limits, subject to approval, will more than double the existing options, providing increased protection for businesses. The enhanced limits are as follows:

Division I Commercial Property Program:

Previous Coverage Limit: $8.4 million per location

New Coverage Limit: $20 million per location

Division II Business Owners Program:

Previous Coverage Limit: $7.2 million per location

New Coverage Limit: $20 million per location

Expanded Coverages: Protecting Businesses and Residences

The FAIR Plan, recognized as California’s property “insurer of last resort,” plays a vital role in ensuring coverage for businesses and residences when other insurance options are unavailable. With the recent adjustments, the FAIR Plan offers extended coverages to provide comprehensive protection for businesses. Some features of the plan include:

Property Insurance Coverage: The FAIR Plan offers coverage for commercial properties, safeguarding businesses from a range of perils, including fire, theft, and vandalism.

Business Owners Program: This program specifically caters to the needs of business owners, providing comprehensive coverage against property damage, liability claims, and business interruption.

Coverage Availability: The FAIR Plan strives to ensure all Californians have access to basic property coverage, promoting consumer choice in the voluntary insurance market.

Coverage Exclusions: What the FAIR Plan Does Not Cover

While the FAIR Plan extends significant coverage options, it is essential to understand the areas where the plan does not provide insurance protection. Some key exclusions include:

Specialized Coverage: The FAIR Plan primarily focuses on basic property insurance and may not cover specialized risks or unique circumstances that require tailored coverage.

Certain Perils: The plan may not include coverage for perils such as earthquakes or floods, which may require separate policies.

Optional Coverage: Additional coverages, such as business income interruption or equipment breakdown, may not be part of the standard FAIR Plan coverage. Businesses requiring such specialized protection should explore alternative insurance options.

The recent decision by the California FAIR Plan to increase commercial coverage limits brings positive news for businesses in the state. This adjustment, which more than doubles the existing coverage options, demonstrates the FAIR Plan’s commitment to strengthening consumer choice in the insurance market. By expanding coverage limits and collaborating with stakeholders, the FAIR Plan aims to restore a viable insurance market for all Californians. While the plan offers comprehensive protection for basic property insurance, it is crucial for businesses to review their specific needs and consider additional coverage options when necessary. With the upcoming changes, businesses can look forward to increased options and security, promoting stability and growth in the California commercial coverage market.

Juan Cruz

VP – Marketing & Development

Juan Cruz is the VP – Marketing & Development at Inszone Insurance Services. He joined the company in 2016, bringing with him over 7 years of experience in direct response Marketing. Juan holds a Bachelor’s degree in Global Studies as well as a minor in Anthropology from the University of California Los Angeles (UCLA). In his current role at Inszone he oversees all aspects of marketing, entrusted with the task of building a consistent brand as well as successful direct response campaigns. During his career, Juan has helped multiple companies improve and expand their digital presence, grow their lead generation, and improve their brand.

Juan is a travel enthusiast with 25 countries visited so far, Scuba diver and Bike rider, believes in working hard to enjoy life to the fullest.

Change Contrast
Change Font Size
Reset to Default Settings
Close the Toolbar