Sure. So, the California Fair Plan was developed, or it came about in the late 60s after the riots in LA. And, the California Fair Plan is required and mandated by the State of California. A misconception often is that it’s a state-run plan. It’s actually not a state-run plan. It’s once again a state mandate and required.
But it’s actually a true insurance pool that is made up of all the consumers in California that need to utilize that and on any preferred or standard insurance company.

So, if you have a state farm policy, let’s say there’s a small percentage of that state farm policy that you pay a tax on, that actually goes into the California State Plan … California Fair plan … to help run and operate that. It’s a very small percentage. So, it truly is a pool that a lot of consumers are having to go to. Now, it was designed, as I mentioned, in the late 60s after the riots. And it was utilized for those properties that were really hard to place and either had a very bad loss history, or they weren’t upkept, and no insurance company would want to write them because the risk is too high.

That’s kind of interesting the history on that, because I honestly didn’t know that. So it’s something equivalent to there were these terrible riots, homes burned, homes were damaged, there wasn’t a lot of incentive or desire among insurance companies to go back into those neighborhoods. That’s kind of analogous to what’s happening here. Obviously very different situation than riots. But I guess it’s just an aversion to areas where there’s mass destructive events. That’s kind of what it is.

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