Standard property policies leave gaps: flood, earthquake, and, in parts of California, wildfire risks that the voluntary market won't write. California fills them with the FAIR Plan, the California Earthquake Authority, the federal NFIP, and difference-in-conditions policies. Wildfire mitigation rules also affect rating. The national guide covers inland marine, flood, and other specialty coverages in general.

California FAIR Plan (CIC 10090 and following)

• The FAIR Plan is the residual market for basic property insurance when the voluntary market won't provide it.
• Basic property insurance means the standard fire policy and extended coverage perils, plus vandalism and malicious mischief, and includes mobilehomes (CIC 10091(c)).
• It does not include auto risks or commercial agricultural commodities and livestock.
• Every insurer writing basic property insurance must be a member. Members share the FAIR Plan's writings, expenses, and losses in proportion to their basic property premiums (CIC 10095).
• FAIR Plan coverage is subject to a maximum coverage limit under its plan of operation.
• Because the FAIR Plan provides only basic coverage, owners often add a difference-in-conditions (DIC) policy for liability, theft, water damage, and other coverages.
• A residential nonrenewal notice must point the insured to the FAIR Plan, DIC coverage, and the CDI's Home Insurance Finder (CIC 678(e)).

Earthquake

• Residential property insurers must offer earthquake coverage (CIC 10081). It may be written directly, through an affiliate, or through an agent or broker with another insurer (10084).
• The California Earthquake Authority (CEA) is a state-created entity that sells only basic residential earthquake policies (CIC 10089.6).
• A homeowner can buy a CEA policy only through a CEA participating insurer (10089.26).
• CEA policies use a percentage-of-limit deductible.
• Fire following an earthquake stays covered under the property policy even when earthquake is excluded (CIC 10088.5).

Flood

Standard policies exclude flood. Coverage comes from the National Flood Insurance Program or private flood insurers. California insurers must clearly disclose that perils such as flood are not covered (CIC 10102).

Wildfire mitigation

• Safer from Wildfires. Insurers that use wildfire risk in rating must give credit for specified property-level and community-level mitigation (10 CCR 2644.9).
• Defensible space. In a state responsibility area, owners must keep 100 feet of defensible space around structures, not beyond the property line. Fuel reduction is more intense within 30 feet, and an ember-resistant zone applies within 5 feet (Pub. Res. Code 4291).

Common exam traps

• The FAIR Plan provides basic coverage (fire, extended coverage, vandalism), not auto or full homeowners coverage.
• Every basic property insurer is a FAIR Plan member, sharing by premium written.
• CEA coverage is available only through participating insurers.
• Defensible space: 100 / 30 / 5 feet.