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Newsom Signs Bipartisan Overhaul With State-Backed Financing to Shore Up California’s FAIR Plan

The laws let the FAIR Plan access state-backed bonds, stretching claim payouts over years to lower the chance of running out of cash.

FILE - Lots sit empty after the homes were destroyed in the Eaton Fire in Altadena, Calif., June 4, 2025. (AP Photo/Jae C. Hong, File)
FILE - A firefighter battles the Palisades Fire in Mandeville Canyon, Jan. 11, 2025, in Los Angeles. (AP Photo/Jae C. Hong, File)
California Gov. Gavin Newsom speaks before signing legislation related to student literacy in Los Angeles on Thursday, Oct. 9, 2025. (AP Photo/Damian Dovarganes)
FILE - Smoke from the Palisades Fire rises over a ridge, Jan. 11, 2025, in Los Angeles. (AP Photo/Richard Vogel, File)

Overview

  • AB 226 authorizes the California I‑Bank to issue bonds and provide loans for the FAIR Plan and allows multi‑year claim payments after disasters, easing the prior 30‑day assessment burden on member insurers.
  • AB 234 adds two nonvoting legislative representatives to the FAIR Plan’s governing committee, a move aimed at improving transparency at a carrier long criticized for limited financial disclosures.
  • Consumer‑facing changes include SB 525 requiring comparable coverage for manufactured homes and AB 290 mandating an automatic payment option, while AB 1 updates the state’s Safer from Wildfires standards.
  • January’s Palisades and Eaton fires produced roughly $4 billion in FAIR Plan losses and a $1 billion assessment on member carriers, with nearly 600,000 home policies on the plan as of June and a recent 36% rate filing.
  • Separate measures signed this week speed Los Angeles wildfire recovery by accelerating rebuilding permits, allowing temporary on‑site housing during reconstruction, granting property tax relief, and funding home‑hardening and defensible‑space projects.