By Lisbeth Abigail Rosales
On February 2, 2026, California’s Department of Insurance (DOI) Commissioner, Ricardo Lara, and Assemblymember Calderon announced legislative bill AB 1689 (Calderon), aimed at transforming the California FAIR Plan. On December 22, 2025, DOI released a Report of Examination that audited and evaluated the FAIR Plan and whether it complied with insurance laws, was fiscally responsible, and was properly managed. The report found many weaknesses; one of the biggest was the plan’s high-risk of wildfire catastrophes. Despite some positive findings, the FAIR Plan has shortcomings and has even led DOI to take legal action against the plan for denying smoke-damage claims. With private insurance companies refusing to write policies in wildfire-risk areas, California homeowners are left to rely solely on the FAIR Plan. As the FAIR Plan becomes one of California’s largest insurers, it creates a situation that desperately needs a solution.
Current FAIR Plan coverage leaves homeowners underinsured and requires them to get additional policies, which are expensive and not always available. The AB 1680, also known as the Make It Fair Act, will require the FAIR Plan to comply with recommendations from examination reports or other reports issued by the DOI Commissioner and will issue fines for failure to comply. The DOI Commissioner will also be authorized to adjust the FAIR Plan’s policy limits and require additional insurance coverage options. The Act will also provide a formal enforcement process for violations and allow appeals through the APA or Insurance Code remedies.
However, insurers are concerned that this act could destabilize the market because if the FAIR Plan expands coverage, its losses could skyrocket, leaving insurers to cover them. In the event of such a catastrophe, insurers could be pushed to leave the market. Insurance premiums are already rising, and expansion of coverage could lead to even higher premiums. As the bill takes on the “market killer” name, it also gains support from consumer advocates due to the difficulty of homeowners being insured.
AB 1680 was amended on March 25, 2026, and re-referred to the Assembly Committee on Insurance on March 26, 2026.