Originally authored by Samuel Roth, Esq.

California's insurance landscape continues to evolve in response to increasing wildfire risks and insurance market instability. In October 2025, Governor Gavin Newsom signed a comprehensive package of bills aimed at stabilizing and modernizing the state's "insurer of last resort," the California FAIR Plan. In addition, the Governor signed Senate Bill 547, which extends significant protection for property owners in wildfire-affected areas, with important implications for homeowners associations throughout the state.

The New Post-Wildfire Insurance Protections

SB 547 adds crucial new protections for commercial property insurance policyholders in wildfire-affected areas. Under this new law, insurance companies are prohibited from canceling or refusing to renew commercial property insurance policies (such as those carried by associations) for properties located in an area where a wildfire has occurred.

This protection applies for one year following the declaration of a state of emergency. Specifically, it prevents insurers from making coverage decisions based solely on the fact that the insured structure is in an area where a wildfire occurred.

For associations, this represents a critical safeguard. Communities that experienced or narrowly escaped wildfire damage will have breathing room to assess their situation, implement mitigation measures, and secure alternative coverage without facing immediate policy cancellations. However, it's essential to note that these protections don't apply if the property was not covered by commercial property insurance at the time of the fire.

Changes to the California FAIR Plan

In addition to legislative changes, California Insurance Commissioner Ricardo Lara has introduced critical changes that may significantly benefit homeowners associations, particularly those with multiple buildings. Previously, the FAIR Plan offered a combined coverage limit of $20 million per location for all building coverage, business personal property, and associated coverages. This left most, if not all, multi-building condominiums and homeowners associations unable to benefit from the FAIR Plan, as the $20 million total had to cover all buildings at a single location.

The FAIR Plan now provides up to $20 million per individual structure, with a total aggregate limit of $100 million per location. This fundamental shift from location-based to building-based coverage represents a fivefold increase in potential coverage for multi-building properties. For a condominium association with five separate buildings, coverage options have expanded from a possible total of $20 million to $100 million. While this change to the FAIR Plan provides much-needed relief for California associations struggling to find adequate coverage in the traditional market, large associations with numerous buildings may still find the $100 million aggregate cap insufficient for full replacement value coverage.

Moving Forward

While these reforms provide essential protection and breathing room to some qualifying associations, the FAIR Plan should serve as a bridge—not a permanent destination—for California property owners. Long-term insurance stability requires proactive risk management, strategic planning, and ongoing engagement with insurance markets. Associations should review their coverage, assess their wildfire risk exposure, explore mitigation opportunities, and work closely with insurance professionals and their community association counsel to navigate California's evolving insurance landscape.