Dear Editor,

This is a cautionary tale for everyone who purchases property/homeowners’ insurance in Pennsylvania from an insurance company which also does business in California.

First, a small history lesson. In 1968, California created what’s called The FAIR Plan (Fair Access to Insurance Requirements). The FAIR Plan is a state-sponsored property insurance program, created in the aftermath of the 1965 Los Angeles Watts riots. It offers very expensive property insurance of-last-resort to anyone (residents and businesses alike) who cannot find or acquire private market property insurance. One of the provisions of the FAIR Plan is the requirement that every insurance company doing business in California must contribute to a “shared risk pool” to subsidize payment of claims once the FAIR Plan runs out of money — which it did earlier this year because of the L.A. fires.

Fast forward to the present. I recently received my annual property insurance policy documents for the upcoming plan year. I’ve had a property insurance policy with the same company — its mascot is an Emu — for the past eight years. I’ve always paid the premiums on time and have never filed a claim for damages in the eight years I’ve been with the company. Despite my clean record, the cost for the same coverage as last year’s policy had risen by 59%. It took some digging but I’ve learned why. My new insurance premium would help subsidize California’s FAIR Plan because the insurance company is licensed by California to sell homeowners insurance in the state. In essence, I wouldn’t “only pay for what I need,” I’d “pay for what L.A. needs” as well.

So, I gave the bird to the bird and went with an insurance company whose mascot is a regal Royal Stag. I saved $1,200 for the same policy coverages across the board. That’s because my new insurance company stopped selling homeowners insurance policies in California a year ago and owes nothing to the FAIR Plan.

Remember this if you’re confronted with an outrageous and unexplained spike in insurance premiums.

L. Ernie Foucault

Kresgeville