FAIR Plan Will Not Cover Liability for Personal Injuries
On December 5, 2025, the Court of Appeal in Los Angeles has held that the Insurance Commissioner cannot require the California FAIR Plan to include general liability insurance coverage. If you are unable to obtain homeowners insurance from an insurance company, then your insurance of last resort is the FAIR Plan. Historically, the FAIR Plan covered damage to the home and contents only and did not include liability coverage, such as personal injuries and damage to other property not located on the insured property.
In 2021, the Insurance Commissioner issued Order No. 2021-2 requiring the FAIR Plan to include premises liability and incidental workers compensation, for personal injuries on the insured property. This would make the insurance coverage under the FAIR Plan more like a traditional homeowners policy. The statute adopting the FAIR Plan stated that it was to cover “basic property insurance.” The Court of Appeal held that this language did not empower the Insurance Commissioner to extend FAIR Plan coverage to include liability coverage.
If you are unable to obtain a traditional homeowners insurance policy which includes liability coverage and resort to the FAIR Plan in order to obtain fire insurance, be sure to give very serious consideration to buying an additional owner’s policy to cover your personal property and general liability.
General liability insurance is a lot more than just protection against judgments against you. You generally can protect yourself by keeping your property safe, driving carefully and staying out of trouble. Even so, from time-to-time, someone does something crazy and tries to blame you. After paying your insurance deductible, the insurance company pays all of your attorney fees. You carry insurance more to protect you from the attorney fees than from the actual liability.
If you end up on the FAIR Plan, make sure you obtain separate additional liability insurance.
If you have any questions regarding any of this call us 510-270-5559 or email us.