California's FAIR Plan faces challenges from Watts to wildfires

California's insurance market has seen a significant shift as major carriers withdraw wildfire coverage, funneling homeowners into the state's insurer of last resort, the FAIR Plan. Since 2019, the FAIR Plan has expanded to cover nearly 700,000 properties with potential losses of $788 billion, amid rising wildfire risks and escalating reinsurance costs. This growth has led to concerns over a "death spiral," increased financial exposure, and disparities, with low-risk communities subsidizing high-risk areas and the plan facing potential multibillion-dollar bailouts.

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