Commissioner orders insurer of final resort to extend industrial protection limits

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California Insurance Commissioner Ricardo Lara instructs the California FAIR Plan Association to increase coverage limits for companies that have turned to the insurer of last resort for commercial property insurance.

As part of that decision, Lara changed the FAIR plan’s deployment schedule. As part of the changes, the Division I Commercial Property Program of the FAIR plan would increase its combined coverage limits from $ 4.5 million to $ 8.4 million. Likewise, FAIR Plan’s Division II business owner program limits would also be raised from $ 3.6 million to $ 7.2 million.

The California Department of Insurance noted in a statement that these coverage limits had not been raised in decades – since at least 1997 for the Division I Commercial Property Program and 1994 for the Division II Businessowners Program – although the Consumer Price Index indicates that the cost has been down since mid doubled by the end of the 90s.

“My order is part of an ongoing commitment to help California businesses thrive as our economy recovers from the COVID-19 pandemic,” Lara said in a statement.

The commissioner said that many business owners have raised concerns with him about how difficult it has been for them to obtain insurance, which in turn affects their ability to better serve customers.

“Our state’s economic recovery cannot wait. I will no longer tolerate delays from the insurance companies implementing the FAIR plan when businesses and consumers need help today, ”added Lara. “I will continue to use every tool available to help businesses and protect consumers as we continue to seek long-term solutions to hold the FAIR Plan accountable and respond to California consumers and businesses.”

Continue reading: California signs insurance of the last-ministerial bill

In July, California Governor Gavin Newsom signed Law SB 11, which allowed farmers to take out insurance through the FAIR plan. The law was passed in response to the state’s farmers having had difficulty renewing or buying cover since 2019.

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