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Note: CA (un)FAIR Plan is not underwritten nor operated by the State of California. It is a state-mandated insurer of last resort run by an association of admitted insurers. If it experiences losses that exceed its assets and reinsurance coverage (which its president has said is a real probability), then every admitted policyholder in CA would be assessed a fee over the course of 1-3 years to cover the gap.

The CA FAIR Plan only offers $300/sq foot to rebuild, which is far less than the $500-1000/sq foot it costs to build new construction in most parts of the state.

In other words: the backstop for the CA FAIR Plan being unable to charge risk-appropriate premiums is an involuntarily assessment of policyholders in lower risk locations.