This ruling significantly expands the liabilities of the FAIR plan which was already on the verge of insolvency. What happens when it's insolvent? The other insurance companies doing business in the state are forced to bail it out, which is almost certainly going to happen. This means that the insurance companies are essentially being forced to provide similar levels of coverage to the highest fire risk homes in California why not being allowed to charge anywhere near what it would actually cost to insure those homes. This is the primary reason that home insurance companies are fleeing, California. The regulations make it impossible to operate sensibly by charging what is required to reflect the risk posed by wildfires.
The theory of the fair plan is that it would only offer very limited coverage. That's not less true when this ruling. The entire concept of the FAIR plan is now very obviously becoming unsustainable.
https://kennedyslaw.com/en/thought-leadership/article/2025/structure-of-the-california-fair-plan-and-the-financial-challenges/