California Fair Plan provides insurance option for Nevada County homeowners in need |

California Fair Plan provides insurance option for Nevada County homeowners in need

The California Fair Plan website is clear: the program is a last resort, and should be used only after a homeowner attempts to gain coverage elsewhere.

Of course, that’s a difficult mantra to follow when fire has led some insurance companies to stop writing policies.

“It’s probably the only option right now,” said Richard Harris, owner of Harris Insurance Services, of the Fair Plan. “There are very few companies writing.”

The Fair Plan is a good program, despite describing itself as a last resort, said Ryan Harris, senior underwriter and Richard Harris’ son. However, it’s limited, leading the Harrises to advise homeowners obtain additional coverage.

The creation of the Fair Plan — formally the California Fair Access to Insurance Requirements Plan — stemmed from brush fires and riots in the 1960s. It’s a program for people who own insurable property in the state, but can’t get any, its website states.

Some Nevada County homeowners have found themselves in need of the Fair Plan after their insurers opted against renewing their policies. Add to that doubled, or even tripled, costs when they find a new policy.

The reason: wildfire.

“Fire,” Richard Harris said. “It’s all fire.”

Fair Plan

The Fair Plan covers fire, wind and vandalism — that’s it.

“Everything else, you have to add in,” Ryan Harris said. “Do you have any fences? There’s no medical payments. There’s no coverage for a pipe breaking in your house.”

That means homeowners need another policy.

Ryan Harris said it’s important to include damage from falling trees in that extra policy. Some policies exclude falling objects.

“We see more falling tree claims than we see fires,” he added.

The Harrises also advise people to obtain more coverage through the Fair Plan than they think is needed, citing the unknown cost of rebuilding.

That’s a problem with the Fair Plan — it has no extended replacement costs. By insuring more than the house is worth, people will have a buffer for more expensive rebuilding costs if their house is lost.

“No one really knows what it costs to rebuild until you rebuild,” Richard Harris said.


A handful of factors have led to fewer insurance options here. Richard Harris said some insurers that once wrote policies in Nevada County fled when they couldn’t raise their rates.

The state Department of Insurance said it had no information specific to increases in Nevada County’s rates. It’s approved increases when insurers successfully showed future loss projections.

“In the last two years alone, insurance carriers have submitted over 100 applications to the Department of Insurance requesting rate increases for homeowners insurance — more than double the filings from the previous two years,” said Michael Soller, deputy insurance commissioner, in an email.

Another seemingly contradictory issue: the insurers that still write policies here have, in fact, increased their prices. Higher rates led the Nevada County Board of Supervisors to pen a letter to the state insurance commissioner, asking for relief.

One reason for the higher rates is insurers rating homes for years as if they sat, for example, in downtown San Jose, Richard Harris said. The threat of fire has changed that.

Being in a Firewise community can lead to a 5% discount with many insurance companies. Maintaining defensible space won’t by itself keep insurance costs down, but it potentially can lead an insurer to continue writing a policy, Ryan Harris said.

“Insurance has been underpriced for many years,” he added.

He called the higher rates “sticker shock,” saying local homeowners are used to paying a lower rate.

A presentation delivered to supervisors in May supports that argument. County staff presented information showing that in 2016 a Texas homeowner paid over double for a similarly priced California home. A Louisiana homeowner paid even more.

Ryan Harris said one solution to the high rates is more competition. A choice of the Fair Plan, along with one or two other insurers, won’t fix the issue. If the state allowed rate increases for some companies that have fled, they could return. The market would then force prices down, because of the increased competition.

To contact Staff Writer Alan Riquelmy, email or call 530-477-4239.

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