[cmcconomy]

reminds me of the recently enacted FAIR plan in California for last-resort wildfire insurance. It got state dispensation to carry otherwise-disallowed, lopsided balance sheets to cover more people -- but if a small fraction of those people do experience wildfire it'll go bust!

--

edit: see below, I was wrong about FAIR being newly enacted

[throwup238]

The California FAIR Plan was created in 1968 so I’m not sure where you’re getting your information.

It was entirely self funded by premiums until the Eaton and Palisade fires and unlike the NFIP, still hasn’t been bailed out by the federal government.

[cmcconomy]

thanks - I was wrong about the plan being new.

However as of this year it's got ~$600B of exposure and $400MM in funds. at 3MM/residence that's 133 homes before they're bust, right?

see:

https://ains.assembly.ca.gov/system/files/2025-05/assembly-f...

https://calmatters.org/economy/2025/02/homeowners-insurance-...

[throwup238]

> However as of this year it's got ~$600B of exposure and $400MM in funds.

The California FAIR plan only has $377 million in liquid funds because it pays premiums for $5.75 billion worth of reinsurance. Roughly 1% of their clientele (by value) would have to lose their homes to put the plan under strain. That's what may happen with the Palisade/Eaton fires, for the first time in nearly sixty years. Current estimates are $5-9 billion in claims, so the current worst case scenario is a multibillion dollar bailout by the state (not federal!) which is well within the state's budget.

Also a nitpick: (almost?) no one is receiving $3 million on a FAIR plan even in the Palisades or Malibu. That's the theoretical maximum but since it doesn't cover the value of the land, the actual coverage is much lower.

I have a lot more to say about the circumstances of these latest fires (several of my friends lost their homes in both neighborhoods) but suffice it to say I don't think this disaster is representative of future liabilities.

[throwup238]

Oh and next time I'll be sure to quote your entire original post because this:

> It got state dispensation to carry otherwise-disallowed, lopsided balance sheets to cover more people -- but if a small fraction of those people do experience wildfire it'll go bust!

is shit you edited in after you were called out on your ignorance on when the FAIR plan's origins.

You don't know the first thing about how insurance works in California and it shows.

Have some dignity. It's a lot cheaper than California fire insurance.

[cmcconomy]

in fact, I did not edit the original contents of my first message at all, out of respect for the reader. The edit merely acknowledged your point.

[throwup238]

Sorry, I was a bit drunk on this reply. Should have deleted it but its too late