18 LAWYER MONTHLY NOVEMBER 2023 Mother Nature may always have the upper hand, but homeowners who are prepared can minimise the impact of natural disasters. factors or location. FAIR plans currently operate in 26 states, the District of Columbia and Puerto Rico. Other states offer other types of ‘last resort’ options, such as the California Earthquake Authority, the Texas Windstorm Insurance Association and Florida’s state-run Citizens Insurance, which offers coverage for hurricanes and sinkholes. Mitigating Risk: Insurance Companies Investing in Private Firefighters In 2010, Chubb Insurance hired a private team of firefighters to protect some homes threatened by a wildfire in the Colorado foothills west of Boulder. Although limited to fire-prevention out in claims settlements exceeds the premiums collected from policyholders. Some insurance companies are forced to limit coverage or even stop offering new policies in certain regions. Citing wildfire risk and the state’s limit on insurance premiums, Allstate and State Farm have stopped writing new homeowner policies in California. Farmers Insurance placed a cap on the number of policies in California. When homeowners cannot find affordable coverage through traditional insurance companies, they may turn to ‘insurers of last resort’, or FAIR plans, which can operate similarly to a clearinghouse for participating insurance companies. These statemandated programs offer property insurance to individuals and businesses facing difficulties in obtaining insurance in the standard market. The goal of FAIR plans is to ensure equal access to insurance, regardless of property risk
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