> 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.
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.
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.