The FAIR Plan Was Meant to Insure Against Racism, Not Wildfires
The California program was created to protect urban neighborhoods. Now it’s become an incentive to build in fire-prone areas.
The Pacific Palisades in the aftermath of the Palisades Fire.
Photographer: Myung J. Chun/Los Angeles TimesWith the wildfires in Southern California finally contained, the finger pointing has begun — with much of the ire aimed at the state’s patchwork system of fire insurance. There’s special scrutiny of the so-called “FAIR Plan,” a state-run insurer of last resort that has only $377 million in reserves. There are growing fears that this backstop may need a bailout to cover the catastrophic losses.
FAIR, which stands for Fair Access to Insurance Requirements, has come to play a critical role in the state, as more private insurers have declined to provide coverage to homeowners living in areas susceptible to wildfires. Yet the deeper history of this program reveals that it was created with an entirely different purpose. How FAIR went from an attempt to end racial discrimination to what’s now effectively an incentive to build homes in fire-prone neighborhoods is a strange story of good intentions gone awry.