Hundreds of thousands of California policyholders now rely on the FAIR Plan after private carriers reduced availability in parts of the state. It provides basic property coverage for covered perils, but many homeowners still need companion/DIC coverage to address gaps. Here's what to review before assuming you're fully protected.
Important: Read Before You Assume You're Covered
The California FAIR Plan was created as a last-resort source of basic property insurance when traditional coverage is not reasonably available. Understanding what the policy covers — and what may require companion coverage — matters enormously before a loss.
The Scale of the Problem
How We Got Here
Claim Handling Reality
The FAIR Plan exists to provide access — not to be a best-in-class claims partner. After major California fire events, homeowners with limited or fire-only coverage can face difficult claims, documentation, and coverage-coordination questions. The issue is often not just the claim process — it is whether the missing coverages were purchased before the loss.
The Solution
A Difference in Conditions (DIC) policy wraps around your FAIR Plan fire policy and fills in all the coverage it excludes. Together, they approximate a real homeowners policy — though at higher total cost.
FAQ
The California FAIR Plan is the state's insurer of last resort — created to provide basic fire insurance to homeowners who cannot obtain coverage in the private admitted market. It is not a homeowners policy. It covers fire and a handful of named perils only, and excludes personal liability, theft, water damage, loss of use, and most other standard homeowners coverages.
If an admitted market carrier will write your property, that is almost always the better option. Admitted market homeowners policies (HO3, HO5) provide far broader coverage than FAIR Plan + DIC, and are typically less expensive. The problem is that admitted market carriers have restricted or stopped writing many California ZIP codes — particularly in wildfire-adjacent areas. We always check admitted market availability first before recommending FAIR Plan + DIC.
A Difference in Conditions (DIC) policy fills all the gaps left by your FAIR Plan fire policy. If you have only a FAIR Plan policy with no DIC, you have no liability coverage, no theft coverage, no water damage coverage, and likely no additional living expenses if you're forced out of your home during rebuilding. For any California homeowner relying on the FAIR Plan, a DIC policy is not optional — it is essential.
Combined FAIR Plan + DIC premiums vary significantly by property location, value, construction type, and coverage limits. For a $700K–$1.5M California home in a moderate-to-high wildfire zone, combined annual premiums typically run $4,000–$12,000/year. This is meaningfully higher than what admitted market homeowners coverage cost before the market disruption — but it provides genuine, comprehensive protection versus fire-only FAIR Plan coverage alone.
The California FAIR Plan is backed by assessments against all admitted market insurance companies doing business in California — meaning if the FAIR Plan cannot pay claims, admitted carriers are required to contribute. However, with $750B in total insured value and a massive catastrophic fire event, the assessment mechanism would be severely strained. This is a known systemic risk that California's insurance regulators actively monitor.
Call us for a coverage review. We will check whether any admitted market carriers can write your property first — that is always preferable. If FAIR Plan is your only option, we place a DIC policy alongside it to fill the critical gaps: liability, water damage, loss of use, theft, and building ordinance/law. We structure both policies simultaneously so there are no coordination gaps between the two.
Don't Wait for a Claim to Find Out
We review your current FAIR Plan coverage, identify potential gaps, and help evaluate companion/DIC coverage or admitted-market alternatives when available for your property.