California's insurer for people without private coverage needs $1 billion more for LA fires claims

SACRAMENTO, Calif. (AP) — California’s plan that provides insurance to homeowners who can’t get private coverage needs $1 billion more to pay out claims related to the Los Angeles wildfires, the state Insurance Department said Tuesday.

The FAIR Plan is an insurance pool that all the major private insurers pay into, and the plan then issues policies to people who can’t get private insurance because their properties are deemed too risky to insure. The plan, with high premiums and basic coverage, is designed as a temporary option until homeowners can find permanent coverage, but more Californians are relying on it than ever. There were more than 452,000 policies on the Fair Plan in 2024, more than double the number in 2020.

The plan says it's expecting a loss of roughly $4 billion from the Eaton and Palisades Fires, which sparked Jan. 7, destroyed nearly 17,000 structures and killed at least 29 people. Roughly 4,700 claims have been filed as of this week, and the plan has already paid out more than $914 million.

Under a FAIR Plan request approved by the state Tuesday, all insurers doing business in California will have to bear half the cost and can pass on the rest to all policyholders in the form of a one-time fee. Insurers can collect that cost in the next two years. The state Insurance Department must approve those costs.

State officials didn't immediately have details on how large the fee would be. In approving the request, the state allowed the plan to send out notices and collect funding from marketplace insurers within 30 days.

It’s the first time the Fair Plan has sought approval for additional money in more than 30 years, the department said.

“I took this necessary consumer protection action with one goal in mind: the FAIR Plan must pay claims just like any other insurance company,” Insurance Commissioner Ricardo Lara said in a statement.

“I reject those who are hoping for the failure of our insurance market by spreading fear and doubt," Lara said. "Wildfire survivors can’t cash ‘what ifs’ to pay for food and rent, but they can cash FAIR Plan checks.”

The plan also expects to receive $1.45 billion in reinsurance to help pay out claims. It anticipates it will have roughly $400 million left by July.

According to the plan, 45% of the wildfire claims filed so far are reported as total losses, 45% as partial losses and 10% as fair rental value.

Insurers on Tuesday said they’re committed to helping the recovery process after the fires and that the ability to recoup some of the cost from ratepayers will prevent companies from leaving the state.

“This is essential to prevent even greater strain on California’s already unbalanced insurance market and avoiding widespread policy cancellations that would jeopardize coverage for millions of Californians,” said Mark Sektnan of the American Property Casualty Insurance Association, the largest national trade association for home, auto and business insurers.

But a consumer watchdog group, which opposed a rule that allows insurers to pass off costs to policyholders, said it will challenge the effort.

"Consumer Watchdog is exploring every legal option to stop a bailout if any insurance company seeks to make consumers pay,” Carmen Balber, executive director of Consumer Watchdog, said in a statement.

California is undergoing a yearslong effort to stabilize its insurance market after several major insurance companies either paused or restricted new business in the state in 2023, which pushed hundreds of thousands of homeowners onto the FAIR Plan. Wildfires are becoming more common and destructive in California due to climate change, and insurers say that’s making it difficult to truly price the risk on properties.

Of the top 20 most destructive wildfires in state history, 15 have occurred since 2015, according to the California Department of Forestry and Fire Protection.

The state now gives insurers more latitude to raise premiums in exchange for issuing more policies in high-risk areas. That includes regulations allowing insurers to consider climate change when setting their prices and allowing them pass on the costs of reinsurance to California consumers.

FILE - A property burned by the Eaton Fire is seen Thursday, Feb. 6, 2025, in Altadena, Calif. (AP Photo/Ethan Swope, File)

FILE - Chris Wilson walks through the remains of his home, consumed by the Eaton Fire, in Altadena, Calif., Thursday, Jan. 30, 2025. (AP Photo/Jae C. Hong, File )

FILE - Trees sway in high winds as the Eaton Fire burns structures Jan. 8, 2025, in Altadena, Calif. (AP Photo/Ethan Swope, File)

FILE - Residences destroyed by the Eaton Fire line a neighborhood in Altadena, Calif., on Tuesday, Jan. 21, 2025. (AP Photo/Noah Berger, File)

LONDON (AP) — A magazine journalist's account of being added to a group chat of U.S. national security officials coordinating plans for airstrikes has raised questions about how highly sensitive information is supposed to be handled.

Atlantic Editor-in-Chief Jeffrey Goldberg detailed a discussion that happened over the Signal messaging app hours before strikes on Iran-backed Houthi-rebels in Yemen ordered by U.S. President Donald Trump.

The National Security Council has since said the text chain “appears to be authentic" and that it is looking into how a journalist’s number was added to the chain.

Here's a look at the app in question.

It's an app that can be used for direct messaging and group chats as well as phone and video calls.

Signal uses end-to-end encryption for its messaging and calling services that prevents any third-party from viewing conversation content or listening in on calls.

In other words, messages and calls sent on Signal are scrambled and only the sender and recipient at each end will have the key to decipher them.

Signal's encryption protocol is open source, meaning that it's freely available for anyone to inspect, use or modify. The encryption protocol is also used by another popular chat service, social media company Meta's WhatsApp platform.

Encryption on Signal is turned on by default, unlike another popular messaging app, Telegram, which requires users to turn it on and does not make it available for group chats.

Signal has features that are found on other messaging apps. It allows users to host group chats with up to 1,000 people and messages can be set to automatically disappear after a certain time.

Signal touts the privacy of its service — and experts agree it is more secure than conventional texting.

But it could be hacked.

Government officials have used Signal for organizational correspondence, such as scheduling sensitive meetings, but in the Biden administration, people who had permission to download it on their White House-issued phones were instructed to use the app sparingly, according to a former national security official who served in the administration.

The official, who requested anonymity to speak about methods used to share sensitive information, said Signal was most commonly used to notify someone that they should check for a classified message sent through other means.

Beyond concerns about security, Signal and other similar apps may allow users to skirt open records laws. Without special archiving software, the messages frequently aren’t returned under public information requests.

In the Atlantic article, Goldberg wrote that some messages were set to disappear after one week and some after four.

Encrypted messaging apps are increasingly popular with government officials, according to a recent Associated Press review.

State, local and federal officials in nearly every state have accounts on encrypted messaging apps, according to the review, which found many of those accounts registered to government cellphone numbers. Some were also registered to personal numbers.

The app's origins date back more than a decade, when it was set up by an entrepreneur who goes by the name Moxie Marlinspike, who was briefly head of product security at Twitter after he sold his mobile security startup to the social media company. Marlinspike merged two existing open source apps, one for texting and one for voice calls, to create Signal.

The nonprofit Signal Foundation was set up in 2018 to support the app's operations as well as “investigate the future of private communication,” according to the foundation's website. The foundation says it is a nonprofit “with no advertisers or investors, sustained only by the people who use and value it.”

The foundation's board has five members, including Brian Acton, who cofounded WhatsApp and donated $50 million to set up the foundation.

Associated Press writers Tara Copp, Aamer Madhani and Eric Tucker contributed to this report from Washington.

FILE - An image of the Signal app is shown on a mobile phone in San Francisco, March 18, 2025. (AP Photo/Jeff Chiu, file)