California’s insurance industry pays into the FAIR Plan, a fund that sells coverage to people who can’t buy it through no fault of their own. Known as the “insurer of last resort,” it only offers fire insurance. Homeowners must purchase a second plan in the private market to cover other hazards.

Devastating wildfires have plagued the state in recent years, destroying thousands of homes. Those claims have cost insurance companies, who have responded by dropping fire insurance policies for many homeowners who live in fire-prone areas. In response those homeowners have relied on the FAIR Plan to provide coverage.

In November, Lara ordered the FAIR Plan to begin selling comprehensive insurance plans starting in 2020. His goal was to save homeowners money by not forcing them to purchase multiple insurance plans.

But the FAIR Plan Association sued Lara in December, arguing his order was illegal. The association said state law only requires the plan to sell basic property insurance.

It argued Lara’s order would have destabilized the insurance market because there would be no incentive for private companies to sell plans in wildfire prone areas.

“The preliminary injunction in no way delays our efforts to advance those elements of the department’s order that we had already been working to implement, including increasing coverage limits and allowing credit card payments,” FAIR Plan Association President Anneliese Jivansaid said in a statement. “We remain committed to working with state leaders, industry professionals and homeowners to ensure all Californians have access to the insurance coverage they need.”

Deputy Insurance Commissioner Michael Soller said his agency and the FAIR Plan Association share the same goals: “to have an effective backstop for consumers” who cannot otherwise obtain insurance.

“The FAIR Plan is an important safety net for consumers and it needs to modernize to meet the increasing challenge of wildfire risk,” Soller said in a statement Wednesday.

The FAIR Plan is not a state agency and is not funded by taxpayers. It is funded by private insurance companies, who are required to participate in the plan if they want to do business in California.

FAIR Plan policies have increased an average of 8% per year since 2016, coinciding with some of the most destructive wildfires in state history. The Camp Fire in 2018 killed 85 people and destroyed roughly 19,000 buildings, generating $12 billion in insurance claims.

Insurance companies in California have declined to renew nearly 350,000 policies since 2015 in areas at high risk for wildfires. That data, which comes from the state Department of Insurance, does not include information on how many people were able to find coverage elsewhere or at what price.

The judge’s ruling came the same day state lawmakers introduced a bill requiring insurance companies to cover all existing homes, including those in areas prone to wildfires, as long as they meet new safety standards. If passed, the measure would also require insurance companies to give homeowners financial incentives for fire safety upgrades.