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FAIR Plan insurance guide: What it is and how it works

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FAIR Plans are designed for homes that don’t qualify for standard homeowners insurance due to their location, condition, or claims history. Most states have some version of a FAIR Plan.

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Homeowners insurance is essential financial protection for anyone who owns their home. But finding coverage can be difficult if the insurance company thinks your home is at heightened risk of damage or loss. In fact, you can often be denied homeowners insurance because of your home’s location, physical condition, and claims history.

If you’re having a difficult time obtaining coverage or your insurance was recently canceled due to your home’s risk, consider applying for your state’s Fair Access to Insurance Requirements (FAIR) Plan. While they’re generally more expensive and have limited protection compared to normal homeowners insurance, FAIR Plans are a good last-resort option for homes that don’t qualify for a standard policy.

Key Takeaways

  • A FAIR Plan is a type of high-risk homeowners insurance for individuals who are unable to find coverage on the standard market.

  • FAIR Plan programs are run on the state level but funded by private insurance companies licensed to do business in that state.

  • Today, 34 states and Washington D.C. offer some form of a FAIR Plan.

  • In order to be eligible for a FAIR Plan, you typically need to prove that you were denied coverage on the standard market.

What is a FAIR Plan?

A FAIR Plan is the type of homeowners insurance you get when you’re not able to find coverage through a typical insurance company. These policies are often necessary in natural disaster-prone areas where homeowners insurance is hard to come by. 

While these plans are instituted at the state level, they’re financially backed by all private insurers licensed to write insurance in that state. Each of these companies shares in FAIR Plan profits, losses, and expenses at an amount proportional to its market share in the state. This allows multiple insurance companies to share the risk of the most high-risk homes, rather than just one company. 

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What does FAIR Plan insurance cover?

FAIR Plan coverage typically varies from state to state. In some states, FAIR Plans come with dwelling coverage and nothing else. Coverage for your personal belongings and additional structures on your property are usually only offered as optional policy add-ons, and loss of use and personal liability coverages generally aren’t even optional.

But in other states, like Texas and New Jersey, FAIR Plan coverage more closely resembles a standard homeowners insurance policy. And in the Golden State, the California FAIR Plan is now required to include a homeowners insurance policy in addition to its standard dwelling fire offering. [1]

Here’s a look at the coverages provided by a Texas FAIR Plan policy:

Coverage typeWhat it coversCoverage limit
DwellingCovers damage to the structure of your house$1 million
Other structuresCovers damage to structures that aren’t attached to your home (sheds, fences, detached garages)10% of dwelling limit
Personal propertyCovers your personal belongings (furniture, electronics, appliances)50%, 60%, or 70% of dwelling limit
LiabilityCovers medical bills and legal expenses if you're held liable for an injury at your home$100,000 or $300,000
Medical paymentsCovers guests’ medical expenses, regardless of who is at fault$5,000 per person/$25,000 per occurrence
Loss of useCovers your temporary living expenses while your home is being repaired or rebuilt10% of dwelling limit

When is a home considered high risk?

A home is often considered high risk when it has any of the following characteristics:

  • It’s located in an area prone to severe weather or natural disasters, like wildfires, hurricanes, windstorms, or tornadoes.

  • It has old plumbing, outdated electrical wiring, a bad roof, or other characteristics that make it ineligible for coverage. 

  • It has a lengthy loss history, meaning several insurance claims have been filed at the residence in the past.  

What to do if you’re denied homeowners insurance

If you’re getting denied homeowners insurance on the standard market, you’re likely considering what other options you have. But before applying for a FAIR Plan, do the following:

Talk to the insurance company

In the event your homeowners insurance is canceled or you’re denied coverage because your home is too high risk, reach out to the insurance company and ask for the reason for denial. Is it because of the home’s location, or is it because of its physical condition? The insurer may provide you with a list of fixes or upgrades that can make your home more insurable.

Talk to your neighbors

Chat with people in your area and ask who they are insured with. If an insurance company is willing to insure the house down the street from you, then they will likely be able to insure your home, too.

Check your state’s department of insurance

In addition to offering FAIR Plans, states also have departments that both regulate property insurance and provide educational resources about how to get insurance on the private market.

Check your state’s website, or call your state’s insurance department to get a list of private insurers who provide homeowners insurance in your area.

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Are you eligible for a FAIR Plan?

If you’ve exhausted every option on the private market, your best option is your state’s FAIR Plan. While the process is fairly different in every state, you’ll likely need to meet the following eligibility criteria:

  • Proof that you were denied coverage from at least two insurers on the voluntary market — sometimes more. In New York, for example, you need proof that you were rejected by at least three insurance companies.

  • You may be required to make improvements or update your home to comply with local building codes, such as upgrading electrical work from aluminum to nonmetallic or copper.

  • The property doesn’t have any outstanding tax liens against it.

  • There aren’t any open insurance claims against the house.

Once you’re ready to apply for a FAIR Plan, contact your state’s insurance department to find out next steps. You’ll likely be directed to an insurance agent who will help you fill out your FAIR Plan application.

Where to find FAIR Plan insurance in each state

State FAIR PlansPhone number
Alabama Insurance Underwriting Association334-943-4029
California FAIR Plan Association213-487-0111
Connecticut FAIR Plan860-528-9546
Insurance Placement Facility of Delaware215-629-8800
District of Columbia Property Insurance Facility202-393-4640
Citizens Insurance Corporation (Florida FAIR Plan)904-296-6105
Georgia Underwriting Association770-923-7431
Hawaii Property Insurance Association808-531-1311
Illinois FAIR Plan Association312-861-0385
Indiana Basic Property Insurance Underwriting Association317-264-2310
Iowa FAIR Plan Association515-255-9531
Kansas All-Industry Placement Facility785-271-2300
Kentucky FAIR Plan Reinsurance Association502-425-9998
Louisiana Citizens Property Insurance Corporation504-831-6930
Maryland Joint Insurance Association410-539-6808
Massachusetts Property Insurance Underwriting Association617-723-3800
Michigan Basic Property Insurance Association313-877-7400
Minnesota FAIR Plan612-338-7584
Mississippi Windstorm Underwriting Association601-981-2915
Missouri Property Insurance Placement Facility314-421-0170
New Jersey Insurance Underwriting Association973-622-3838
New Mexico Property Insurance Program505-878-9563
New York Property Insurance Underwriting Association212-208-9700
North Carolina Joint Underwriting Association (FAIR Plan)(919) 821-1299
Ohio FAIR Plan Underwriting Association614-839-6446
Oregon FAIR Plan Association503-643-5448
Insurance Placement Facility of Pennsylvania215-629-8800
Rhode Island Joint Reinsurance Association617-723-3800
South Carolina Wind and Hail Underwriting Association803-737-6180
Texas FAIR Plan Association800-979-6440
Texas Windstorm Insurance Association512-899-4900
Virginia Property Insurance Association804-358-0416
Washington FAIR Plan425-745-9808
West Virginia Essential Property Insurance Association215-629-8800
Wisconsin Insurance Plan414-291-5353

FAIR Plan insurance — by the numbers

FAIR Plan insurance policies have become more and more popular over the past decade as climate change continues to impact homeowners’ risks of wildfires, tornadoes, hurricanes, and other natural disasters.

  • 34 states and Washington, D.C. offer some type of FAIR Plan coverage for high-risk homeowners

  • Less than 3% of California homeowners had insurance through the state’s FAIR Plan in 2020 [2]

  • The number of homeowners in Texas who received insurance through the state’s FAIR Plan decreased by 7% in 2021 [3]

  • 5% of Florida homeowners had insurance through the state’s FAIR Plan sold through Citizen’s Insurance in 2019 — and that number is only expected to rise [4]

Frequently Asked Questions

How much does a FAIR Plan cost?

FAIR Plans are generally more expensive than a standard homeowners insurance policy, which costs around $1,249 per year, according to the National Association of Insurance Commissioners. The cost of FAIR Plan insurance is determined by many of the same factors that impact your home insurance rates, including your home’s location, construction type, rebuild cost, and deductible amount.

How do you know if you’re eligible for a FAIR Plan?

In most states, you need to provide proof that you’ve been denied coverage by two or three insurance companies before you can become eligible for a FAIR Plan.

How does the California FAIR Plan work?

The California FAIR Plan is often necessary for residents of high wildfire-risk areas who aren’t able to find coverage on the standard market. A traditional dwelling fire policy from the CA Fair Plan covers damage from fire, smoke, lightning, windstorms, explosions, and vandalism, but doesn't cover water damage, theft, or personal liability. But under new orders from the state’s insurance commissioner, the FAIR Plan will be required to offer a comprehensive policy that includes all the same coverages as standard homeowners insurance. The changes will likely take effect in early February of 2022.

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