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Published Date: 10/18/2025

Fixing the California FAIR Plan: The Three T’s of Reform — Training, Technology, and Transparency

California’s insurance market is in a state of unprecedented upheaval. As private carriers continue to pull back from writing homeowners policies in high-risk areas, more residents are being pushed toward the California FAIR Plan, the state’s insurer of last resort.

Originally designed as a safety net for those who couldn’t obtain coverage elsewhere, the FAIR Plan has now become the primary source of coverage for hundreds of thousands of Californians. And as the plan’s size and complexity grow, so do its operational challenges.

Speaking before a California legislative committee, veteran insurance broker Karl Susman—with over 30 years in the industry—outlined three critical areas where the FAIR Plan must urgently improve to meet today’s realities. He calls them the Three T’s: Training, Technology, and Transparency.

These pillars, Susman argues, are essential if the FAIR Plan is to evolve from a strained emergency mechanism into a functional part of California’s modern insurance ecosystem.

The Growing Strain on the FAIR Plan

Before diving into solutions, it’s important to understand what’s happening on the ground.

California’s insurance market has been battered by escalating wildfire losses, inflation-driven repair costs, and regulatory constraints that make it nearly impossible for insurers to charge actuarially sound rates. As a result, many national carriers—including State Farm, Allstate, and Farmers—have paused new business or sharply reduced their exposure in the state.

When private carriers retreat, the FAIR Plan must step in.

The number of FAIR Plan policies has more than doubled in five years, surging past 400,000. Many of these are not rural cabins in the woods—they’re suburban homes, small businesses, and urban properties that once had no trouble finding standard coverage.

But the FAIR Plan was never built to serve as a major-market player. Its infrastructure, staffing, and systems were designed for limited, specialized use. Now, that mismatch is leading to delays, errors, and widespread frustration among agents and policyholders alike.

1. Training: Building Competence in a New Marketplace

Susman’s first “T” is Training, and he points out a striking reality: the number of agents writing FAIR Plan policies has ballooned to around 50,000—many of whom have never written one before.

“These are people who probably would not have written a policy in the past at all,” Susman explained. “All of a sudden, they’re writing FAIR Plan policies. The likelihood of them doing it correctly is pretty low or impossible without training.”

Unlike private insurers, the FAIR Plan doesn’t currently require certification or specialized training for agents to sell its policies. That’s a major gap. In the standard market, carriers insist that producers demonstrate product knowledge before they can bind coverage. FAIR Plan policies, by contrast, are often sold by agents unfamiliar with the nuances of its limited coverage forms.

The result? Mistakes, incomplete applications, and confused consumers.

Many homeowners believe they’re purchasing “full” homeowners insurance when, in reality, the FAIR Plan provides fire-only coverage. Unless the agent pairs it with a supplemental “Difference in Conditions” (DIC) policy, policyholders are left dangerously underinsured.

Susman proposes a certification program—a simple but powerful idea. Before writing FAIR Plan business, agents would need to complete training demonstrating that they understand:

• What the FAIR Plan covers (and doesn’t cover)
• How to properly quote and bind policies
• How to combine FAIR coverage with DIC or companion policies

This kind of certification would reduce errors, improve consumer understanding, and restore trust between brokers, clients, and the FAIR Plan itself.

2. Technology: From “Perfect Storm” to System Resilience

Susman’s second “T” is Technology, an area where the FAIR Plan has faced repeated challenges.

Recently, the organization rolled out a new digital policy system, meant to streamline operations and improve efficiency. Instead, it created a temporary bottleneck—what Susman aptly calls “the perfect storm.”

“The carriers aren’t writing, the FAIR Plan has to write more, more brokers are coming in, and then a new system launches,” he said. “It’s been very challenging.”

Agents report long wait times, technical glitches, and inconsistent communication. Even something as basic as reaching someone by phone has become a victory.

“We’re so excited about a new phone system,” Susman joked, “because that’s where we are now—celebrating phone upgrades.”

His humor underscores a serious point: the FAIR Plan’s technology infrastructure must evolve as fast as its policy count. A system designed for a few thousand annual applications can’t handle hundreds of thousands efficiently.

That means investing in:

• Scalable IT systems capable of handling modern digital workflows.
• Real-time communication tools for agents and consumers.
• Better integration between FAIR Plan systems and private carrier platforms.

A functional, tech-forward FAIR Plan would not only improve processing times but also give brokers confidence that they can serve clients effectively during one of the most stressful moments in their lives—when they’ve just lost or are about to lose coverage.

3. Transparency: Keeping Agents and Consumers in the Loop

The third “T” is Transparency—arguably the most human, and often the most overlooked, element of the FAIR Plan’s modernization.

As Susman explained to lawmakers, independent agents are the face of the system for consumers. They are the ones explaining to homeowners why their policies were non-renewed, why they have to switch to the FAIR Plan, and what that means for their protection.

But too often, agents themselves are in the dark.

“We’re the ones with the licenses who have to explain to the consumers what’s going on,” Susman said. “More information from the FAIR Plan would help us do that.”

He suggested regular updates and open communication about:

• Upcoming technology changes
• System improvements or service interruptions
• Planned policy updates or regulatory changes

Even something as simple as a monthly update bulletin could bridge the gap between the FAIR Plan’s internal operations and the thousands of brokers representing it in the field.

Transparency isn’t just about courtesy—it’s about empowerment. When brokers are informed, consumers get better advice, fewer mistakes occur, and the system functions more smoothly.

A Broader Lesson: FAIR Plan Reform Reflects Market Reform

The issues Susman highlights go beyond the FAIR Plan itself. They mirror the broader dysfunction in California’s insurance ecosystem—a system where regulatory inertia and market withdrawal have pushed a temporary fix into permanent overuse.

The FAIR Plan’s strain is a symptom, not the disease. Without broader reform—faster rate approvals, modern risk modeling, and updated mitigation incentives—the FAIR Plan will remain the default insurer for too many Californians.

Yet even within that broken system, incremental improvements in training, technology, and transparency could make a tangible difference right now.

• Training ensures that consumers understand what they’re buying.
• Technology ensures that coverage can be issued quickly and accurately.
• Transparency ensures that everyone involved—agents, regulators, and homeowners—shares a clear picture of the system’s direction.

The Human Side of the Insurance Crisis

It’s easy to discuss the FAIR Plan in terms of systems and statistics, but at its core, this crisis is human. Every policy written represents a family trying to protect their home, often after receiving a non-renewal notice from a trusted insurer they’ve relied on for years.

For brokers like Susman, these aren’t just clients—they’re neighbors.

“We’re the face to the consumers,” he reminded the committee. “We’re the ones who have to explain why they’re being non-renewed and why they have to go with the FAIR Plan.”

That role requires compassion, clarity, and competence—all of which depend on a FAIR Plan that supports, rather than hinders, the professionals representing it.

A Call for Collaboration

Susman’s message to policymakers was not one of criticism, but of cooperation. The FAIR Plan’s staff, leadership, and the Department of Insurance are all working under extraordinary pressure. But without strategic focus on the Three T’s, the system risks buckling further under the weight of its own success.

The path forward lies in collaboration—between regulators, insurers, and the agents on the front lines. By implementing mandatory training, accelerating technology upgrades, and opening channels for consistent communication, California can take meaningful steps toward a more stable and responsive FAIR Plan.

The FAIR Plan was never meant to be the marketplace of last resort for nearly half a million homes—but that’s where California stands today. Fixing it won’t happen overnight, but as Susman’s testimony reminds us, it can start with three small but vital steps: Training, Technology, and Transparency.