On the FAIR Plan? Read this before you hire us.

Written By Carl Schwenk

Short answer: On the FAIR Plan, an inventory can help you a lot or not at all, and it comes down to how much of your $3 million limit is left for your belongings. If your house uses up all of it, there's no contents coverage to claim against, and paying us to photograph your things won't get you a dime more after a fire. We'd rather tell you that than take your money. If you do have contents coverage, or other policies that cover your belongings, an inventory is how you actually collect it.

What the FAIR Plan covers, and what it doesn't

The FAIR Plan pays for four things: fire, lightning, smoke and internal explosion. Vandalism can be added for an extra premium. Everything else lives on other policies, if you have them.

  • Fire, lightning, smoke, internal explosion: Covered.

  • Vandalism: Optional add-on.

  • Theft: Not covered. Coverage might come from a difference-in-conditions (DIC) policy.

  • Water damage: Not covered. Coverage might come from a DIC policy.

  • Earthquake: Not covered. Coverage might come from an earthquake policy, which the FAIR Plan now offers its dwelling customers through the California Earthquake Authority.

  • Flood: Not covered. Coverage might come from a separate flood policy.

The $3 million squeeze

The FAIR Plan tops out at $3 million for your house, other structures and belongings combined. Every dollar on the house is a dollar that can't go to your stuff.

  • $2.0 million dwelling limit: $1.0 million left for other structures and belongings, at most.

  • $2.6 million dwelling limit: $400,000 left for other structures and belongings, at most.

  • $3.0 million dwelling limit: nothing left for other structures and belongings.

If your house would cost $5 million to rebuild, the FAIR Plan can't fully cover the house, let alone what's in it. Your actual numbers are on your declarations page; the list is just the math.

When an inventory is still worth it

  • You have a contents limit and own more than it. Then the point is collecting all of it, fast. Focus on your most valuable things, and on antiques, art and collectibles (more on those below).

  • You have a DIC policy. It can cover theft and water damage to your belongings, which the FAIR Plan never will. Check its contents limits with your broker. Those claims are item by item, and that's where a record earns its keep.

  • You have earthquake coverage with a contents limit. Earthquake damage to belongings tends to be breakage, claimed one piece at a time.

  • Smoke. Partial losses happen too. Proving what a room held, and what shape it was in, matters when only some of it is ruined.

  • The house itself. Finishes, built-ins and renovations fall under dwelling coverage, not contents. Tell us about them on the walkthrough, and they go in the report in your words, next to our photos.

How the FAIR Plan pays for your belongings

Unless your declarations page shows Personal Property Replacement Cost, the FAIR Plan pays what it would cost to replace an item, minus depreciation for its condition. With that option, it pays full replacement cost once you've actually replaced the thing. Some items always get the depreciated value, option or not:

  • Antiques and fine art

  • Memorabilia, souvenirs and collectors' items

  • Things not kept in good or working condition

  • Outdated things that were stored and unused

Cash, coins, bullion and securities aren't covered at all. For antiques and art, a dated photo showing their condition is the evidence that matters, because condition sets the depreciation.

What the FAIR Plan asks for after a loss

The policy asks you to "prepare an inventory of damaged personal property to the best of your ability." For each item it wants the quantity, a description, where and when you got it, and the amount of the loss, with any records attached. Then you sign a sworn proof of loss, due within 60 days after the FAIR Plan asks for it.

Photos prove you owned something and what condition it was in. They don't prove what you paid. Purchase dates and prices come from you: receipts, card statements, order histories, or your best memory.

California law now also requires insurers to pay part of your contents limit up front after a total loss in a declared disaster: 60%, up to $350,000, with at least 100 days to send an itemized list. We haven't confirmed how that applies to FAIR Plan policies, so ask your broker or the FAIR Plan before you count on it.

What we won't do

We won't tell you what coverage to buy. That's your broker's job, and we'd be guessing. What we will do is look at your declarations page with you before you hire us and tell you honestly whether we're worth it. Sometimes the answer is no.

Sources

Carl Schwenk
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