If you own a home, you'll need homeowners insurance both to meet mortgage requirements and to ensure that your property and finances are completely covered in case of a disaster. But finding a home insurance policy, let alone one that is affordable, isn't always a given if insurance companies consider your home to be too high risk.
As an alternative, several states created Fair Access to Insurance Requirements Plans, or FAIR Plans, to serve as an insurer of last resort for homeowners struggling to find coverage because of their home's geographic area or characteristics.
What is a FAIR Plan?
A FAIR Plan is a type of property insurance that's available for homeowners and commercial businesses that aren't eligible for insurance on the voluntary market in certain states. In other words, if you find that insurance companies are repeatedly denying your application for homeowners insurance because they consider your home's location or characteristics (like its age or build) to be too high risk, you may need FAIR Plan insurance as a stopgap.
Any revenue that's generated or claim losses that are paid out by the FAIR Plan are divvied up proportionally to licensed insurance providers in the state administering the policy according to its market share in the state. For this reason, FAIR Plans are commonly referred to as residual market insurance or "pooled risk" plans.
When do you need a FAIR Plan?
If the risk of insuring a property is exceptionally high, insurance companies often charge higher premiums to account for that risk. But there are certain thresholds of risk that are considered too high, like if a home is older and doesn't meet modern building code requirements, or if it's located in an area prone to wildfire or hurricane damage.
If your home is in a high-risk location
If you live in an area prone to hurricanes, tornadoes, wildfires, or other inclement natural events and your home faces a substantially higher risk of damage compared to others, there's a chance you won't be eligible for a standard homeowners insurance policy.
If your home is older or doesn't comply with building codes
If your home is over 50 or 100 years old and still has its original plumbing and electrical wiring from when it was built, it may be considered too high risk for voluntary market carriers. Additionally, older homes can occasionally become uninsurable when building codes in a community change since the cost of rebuilding the property to comply with the updated code may simply be too high.
If you've had several prior claims
If you've made several home insurance claims in the last five years or the residence you're insuring has has a long list of losses that occurred under prior ownership, insurance companies may view you or your property as too high risk and you may be ineligible for standard homeowners insurance.
FAIR Plan insurance eligibility requirements
If you’ve exhausted every option on the voluntary home insurance market, your best option may be your state’s residual market FAIR Plan. While FAIR Plan eligibility requirements can vary from state to state, most will require you to meet the following criteria.
Proof of coverage denial. You'll likely need proof that you applied for and were denied homeowners insurance from at least two or three standard "admitted" insurance companies. When an insurance company is admitted, it means they are licensed to sell insurance in a particular state in accordance with that state's department of insurance regulations. A company that only sells surplus lines or specialty insurance is not considered an admitted company.
Mandatory home improvements. If your home is in substandard physical condition, like if a section of your roof is missing shingles, or if your plumbing and electricity aren't up to code, you may be required to make repairs or renovations to be eligible for your state's FAIR Plan.
No outstanding tax liens or claims. If there are any outstanding tax liens against the property, it likely won't qualify for FAIR Plan insurance coverage. Similarly, if the home has any open claims with other insurance companies, perhaps because they're still reviewing the case or because they simply haven't provided a settlement yet, that will need to be resolved before you can take out a FAIR Plan policy.
While the quality and cost of FAIR Plan insurance can fluctuate from state to state, these policies are generally subpar and come with a high premium, so the only time you should really look to purchase one is when it's truly the last option at your disposal.
What does FAIR Plan insurance cover?
While FAIR Plan insurance coverage can vary considerably based on your state, most policies provide basic coverage for your home's structure against wind, hail, and fire perils. Coverage for your personal belongings and standalone structures on your property may also be included — though in many cases this coverage is only available as a policy add-on. Other standard home insurance coverages, such as loss of use and personal liability coverages, are rarely included at all in FAIR Plans.
However, due to the increasingly reliance on these policies due to climate change and worsening weather in recent years, insurance departments in a handful of states, including California and Texas, have reworked their FAIR Plans to more closely resemble a standard homeowners insurance policy.
Here's a look at what's covered under a Texas FAIR Plan policy. 
What it covers
Covers damage to the structure of your house
Covers damage to structures that aren’t attached to your home (sheds, fences, detached garages)
10% of dwelling limit
Covers your personal belongings (furniture, electronics, appliances)
50%, 60%, or 70% of dwelling limit
Covers medical bills and legal expenses if you're held liable for an injury at your home
$100,000 or $300,000
Covers guests’ medical expenses, regardless of who is at fault
$5,000 per person/$25,000 per occurrence
Covers your temporary living expenses while your home is being repaired or rebuilt
10% of dwelling limit
How do you get FAIR Plan insurance?
Once you’re ready to apply, contact your state’s insurance department or an independent insurance agent to find out next steps.
FAIR Plans by state
As of early 2024, 33 U.S. states and Washington D.C. offer some form of FAIR Plan home insurance to individuals and businesses who qualify. Here's a list of FAIR Plan resources and contact information for each of these states.
FAIR Plan website
Alternatives to FAIR Plan insurance
If you’re getting denied homeowners insurance on the standard market, considering following these steps before applying for a FAIR Plan.