What is Texas FAIR Plan home insurance?

The Texas FAIR Plan provides home insurance policies to high-risk homeowners who’ve been denied coverage by at least two insurers on the standard market.

Jennifer Gimbel

By

Jennifer Gimbel

Jennifer Gimbel

Senior Managing Editor & Home Insurance Expert

Jennifer Gimbel is a senior managing editor and home insurance expert at Policygenius, where she oversees our homeowners insurance coverage. Previously, she was the managing editor at Finder.com and a content strategist at Babble.com.

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The Texas FAIR Plan was designed to ensure all homeowners qualify for home insurance coverage in Texas — regardless of whether they’re at high risk of filing a claim. All private home insurance companies are required to participate in the Texas FAIR Plan. However, it’s best saved as a last-resort option since coverage is less robust and more expensive compared to traditional home insurance policies.

Key takeaways

  • Home insurance through the Texas FAIR Plan is available to homeowners who’ve been denied coverage by at least two insurers on the voluntary market.

  • Texas FAIR Plan insurance is typically more expensive and less comprehensive compared to traditional homeowners insurance policies available through private insurers.

  • All private insurance companies in Texas are required to write policies and share losses under the Texas FAIR Plan.

What is Texas FAIR Plan insurance?

The Texas FAIR Plan is a state-mandated insurance program that provides home insurance to homeowners who’ve been denied coverage on the voluntary market. 

All private insurance companies in the state are required to write policies and share losses under the Texas FAIR Plan.

Because it’s seen as a last-resort coverage option for homeowners considered too high risk to insure through the private market, these plans are usually less comprehensive than traditional insurance policies with higher rates.

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Insurance through the Texas FAIR Plan might be in your future if any of the following apply to you:

  • Your home has a history of frequent claims

  • Your home is located in a high-risk flood, hurricane, or windstorm zone

  • You have poor credit or a history of missed insurance payments

  • Your home insurance has been canceled or nonrenewed in the past

→ Find out what states offer FAIR Plan insurance & how it works

What does the Texas FAIR Plan cover?

There are several different types of policies available through the Texas FAIR Plan depending on the type of property you own or live in.

  • HO-A Homeowners Policy

  • TDP-1 Dwelling Policy

  • HO-CONB Condominium Policy

  • HO-BT Tenant Policy

Here’s an example of the coverages included and maximum limits for a standard Texas FAIR Plan homeowners policy:

Texas FAIR Plan coverage

What it is

Maximum limits for HO-A Homeowners Policy

Dwelling

Covers damage to your home for its actual cash value after a covered loss

Up to $1 million

Other structures

Covers damage to detached garages, sheds, fences, and other structures besides your home after a covered loss

10% of dwelling coverage

Personal property

Covers damage to your personal property like clothing, furniture, and appliances at its actual cash value after a covered loss

50%, 60%, or 70% of dwelling coverage

Liability

Covers legal and medical bills if someone is injured or their property is damaged while at your home and you’re found legally responsible

$100,000 or $300,000

Medical payments

Covers medical bills for guests injured on or off your property — regardless of who’s at fault

$5,000 per person / $25,000 per occurrence

Loss of use

Covers hotels, restaurant, and transportation if you’re unable to stay in your home while repairs are made after a covered loss

10% of dwelling coverage

What perils are covered by the Texas FAIR Plan?

The following perils are covered through Texas FAIR Plan insurance:

  • Fire

  • Lightning

  • Sudden and accidental damage from smoke

  • Windstorm and hail — only if you live in an eligible county

  • Explosion

  • Aircraft and vehicles

  • Vandalism and malicious mischief

  • Riot and civil commotion

  • Theft — not available for TDP-1 policies

Keep in mind that TDP-1 Dwelling Policies are only required to provide coverage for fire and lightning perils, though you can add on any additional perils listed above for an extra fee.

Windstorm and hail coverage is not available for policyholders living in a designated catastrophe area in:

  • 14 coastal counties

  • A portion of Harris County located east of State Hwy. 146

  • The city limits of Pasadena, Morgan’s Point, Shoreacres, Seabrook, or LaPorte

If you live in any of these areas, you’re required to have a Windstorm, Hurricane, and Hail Exclusion Agreement attached to your policy which states that any damage from this type of peril is not covered by the policy. To get coverage, you’ll need to purchase a separate windstorm, hurricane, and hail insurance policy through the Texas Windstorm Insurance Association. 

What perils are not covered by the Texas FAIR Plan?

The following perils aren’t covered through Texas FAIR Plan insurance:

  • Falling trees, limbs, or other objects 

  • Collapse of a building or part of one 

  • Breakage of glass 

  • Damage from the weight of ice, snow, or sleet 

  • Freezing of plumbing, heating, air conditioning, or automatic fire protection sprinkler system or household appliance 

  • Mold, fungi, or other microbe remediation

  • Backup of sewer or drains 

  • Items that may be scheduled, such as expensive jewelry 

What coverage add-ons are available through the Texas FAIR Plan?

The following endorsements are available through Texas FAIR Plan insurance. 

  • Sudden and accidental discharge of water or steam

  • replacement cost coverage for dwelling

  • Replacement cost coverage for personal property

  • Additional insured

  • Additional premises liability coverage

  • Fair rental value

  • Condo loss assessment coverage

  • Unit owners rental to others

Keep in mind you might not be eligible for all of these endorsements — it’ll depend on the type of policy you have.

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Who is eligible for the Texas FAIR Plan?

To qualify for insurance through the Texas FAIR Plan, you must meet the following eligibility criteria:

  • Denied coverage by two private home insurance companies in Texas

  • Have no valid offer of comparable home insurance from an insurer in the state

  • Live in a one- or two-family house, rental home, rental apartment, townhouse, manufactured home, or condo that meets underwriting standards

You also won’t qualify for coverage through the Texas FAIR Plan if any of the following apply to you or your home:

  • Property condemned due to its condition 

  • Property in disrepair or with existing damage 

  • Vacant property 

  • Property with excessive or unusual liability exposure — i.e. dangerous animal, pool or trampoline not within a fenced yard

  • You were convicted for arson, fraud, or other insurance-related offenses

  • Have more than eight paid claims — excluding glass claims — within the past three years 

  • Live in a mobile home — unless the wheels are removed and the mobile home is tied down 

  • Have a farm or ranch used for business on the property

  • Your home is occupied for business use 

How long does a Texas FAIR Plan policy last?

Texas Fair Plan policies are issued for a one-year term. And every two years, you must reapply for home insurance on the standard market.

If you’re once again denied coverage by at least two home insurance companies in Texas and don’t receive a valid offer of comparable home insurance, you can reapply for coverage through the Texas Fair Plan.

How much does the Texas FAIR Plan cost?

Home insurance through the Texas FAIR Plan typically costs more than traditional home insurance policies since there’s more risk of you filing a claim.

Actual rates for Texas FAIR Plan insurance weren’t available as of February 2022, but we can tell you you’ll likely pay more than $2,853 — which is the average cost of homeowners insurance in Texas according to Policygenius data.

How to get a Texas FAIR Plan quote

Follow these steps to get a quote for a Texas FAIR Plan policy:

  1. Apply for insurance on the voluntary market. You’ll need to show proof you’ve been denied coverage from two private insurance companies before you’ll qualify coverage through the Texas FAIR Plan.

  2. Find an agent that sells Texas FAIR Plan insurance. You can use the Texas Fair Plan Association website to find an agent near you.

  3. Talk through your coverage options. Your agent will walk you through the different coverage options available and discuss what makes the most sense for your home and budget.

  4. Work with the agent to submit your application. This will include answering questions about yourself and your home, having your credit checked, and potentially having your home inspected.

  5. Review your quote and sign up for a payment plan. Once you have your official quote and you’re happy with your coverage, you’ll need to choose a payment plan. We’ll go through the different options available below.

  6. Sign your policy. Once your payment plan is set, the last step will be to sign your policy.

What payment options are available through the Texas FAIR Plan?

The Texas FAIR Plan does not accept payments via credit cards or debit cards. Instead, you’ll need to pay through one of three ways:

  • Through its online portal using direct withdrawal from your checking or savings account

  • Making a payment over the phone with a TFPA representative by calling 800-979-6440

  • Mailing a check to:

Policy Premium Payment Texas FAIR Plan Association P.O. Box 733916 Dallas, TX 75373-3916

When you apply for coverage, you’ll need to choose a 10-pay, 4-pay, or 2-pay payment plan. You can make each payment through any of the above methods, or set up recurring auto payments through your bank account.

Keep in mind you can’t change your payment plan after you’ve chosen it at the time of submitting your application.

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Texas FAIR Plan — by the numbers

Here are a few quick Texas FAIR Plan stats to learn more about the state-mandated program:

  • The Texas FAIR Plan was created in 1995 [1]

  • The first Texas FAIR Plan policy was issued in 2002 [2]

  • As of September 2020, there are nearly 68,541 policies in force through the Texas FAIR Plan [3]

  • The number of homeowners in Texas who received insurance through the state’s FAIR Plan decreased by 7% in 2021 [4]

Frequently asked questions

What does the Texas FAIR Plan cover?

A Texas Fair Plan homeowners policy includes the standard dwelling, other structures, personal property, liability, medical payments, and loss of use coverages you’d get with a traditional home insurance policy.

It also covers you from the following perils: fire, lightning, sudden and accidental damage from smoke, explosion, aircraft and vehicles, vandalism and malicious mischief, theft, and riot and civil commotion. You also might be covered against windstorm and hail depending on what area of Texas you live in.

What is the purpose of Texas Fair Plan insurance?

The purpose of the Texas Fair Plan is to provide insurance to high-risk homeowners who’ve been denied coverage by at least two insurance companies on the voluntary insurance market.

Does the Texas FAIR Plan cover water damage?

The Texas FAIR Plan might cover water damage from windstorms, hurricanes, and hail depending on where you live in Texas. If it doesn’t, you can always take out a separate policy through the Texas Windstorm Insurance Association (TWIA) or add a sudden and accidental discharge of water and steam endorsement to your existing policy.

However, the Texas FAIR Plan does not cover water damage due to flooding — you’ll need to take out a separate flood insurance policy for that added protection.

References

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Policygenius uses external sources, including government data, industry studies, and reputable news organizations to supplement proprietary marketplace data and internal expertise. Learn more about how we use and vet external sources as part of our

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  1. Texas FAIR Plan Association

    . "

    TFPA by the Numbers

    ." Accessed January 31, 2022.

  2. Texas Department of Insurance

    . "

    Texas FAIR Plan Association Overview | December 16, 2021

    ." Accessed January 31, 2022.

Author

Senior Managing Editor & Home Insurance Expert

Jennifer Gimbel

Senior Managing Editor & Home Insurance Expert

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Jennifer Gimbel is a senior managing editor and home insurance expert at Policygenius, where she oversees our homeowners insurance coverage. Previously, she was the managing editor at Finder.com and a content strategist at Babble.com.

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