Home insurer asks for 36% rate hike

FAIR Plan cites losses in January fires. State insurance chief will decide on increase.

- BY LAURENCE DARMIENTO

GINA FERAZZI Los Angeles Times FIREFIGHTERS try to save homes as the Eaton fire burns Jan. 7 in Altadena.

The California FAIR Plan, the state’s home insurer of last resort, is seeking an average 35.8% rate hike, its largest in years, following billions of dollars of losses incurred in the January firestorms.

The Los Angeles-based insurance pool, operated and backed by the state's licensed home insurers, filed last week for the dwelling policy rate hike, which must be reviewed and could be reduced by the state insurance commissioner.

"By statute, FAIR Plan rates must be sufficient to pay anticipated claims and expenses," FAIR Plan spokesperson Hilary McLean said in a statement.

"The FAIR Plan is working closely with the California Department of Insurance to ensure its rates reflect the current risk portfolio, expenses and growth as the state’s insurer of last resort."

The plan, which has added hundreds of thousands of policyholders in recent years as insurers have pulled back from the market amid rising wildfires, has estimated losses of $4 billion from the January blazes. Those losses forced it to assess its member carriers $1 billion in order to pay all claims.

The rate hike would hit individual homeowners unevenly, with many experiencing greater increases and others seeing decreases if they live in neighborhoods that are not prone to wildfires.