FAIR Plan insurance guide: What it is & how it works
FAIR Plans are designed for homes that don’t qualify for standard homeowners insurance due to their location, condition, or claims history. Over 30 states have some version of a FAIR Plan.
Pat Howard is a managing editor and licensed home insurance expert at Policygenius, where he specializes in homeowners insurance. His work and expertise has been featured in MarketWatch, Real Simple, Fox Business, VentureBeat, This Old House, Investopedia, Fatherly, Lifehacker, Better Homes & Garden, Property Casualty 360, and elsewhere.
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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This article has been reviewed by a licensed Policygenius expert to ensure that sources, statistics, and claims meet our standard for accurate and unbiased advice.
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. You can often be denied homeowners insurance because of your home’s location, physical condition, and claims history. That's where Fair Access to Insurance Requirements (FAIR) Plans come in.
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 Plans are usually more expensive and have limited protection compared to normal homeowners insurance.
FAIR Plan programs are run on the state level but funded by private insurance companies licensed to do business in that state.
Today, 33 states and Washington, D.C. offer some form of a FAIR Plan.
To be eligible for a FAIR Plan, you typically need to prove that you were denied coverage on the standard market.
See if you qualify for FAIR Plan home insurance coverage
A FAIR Plan is the type of homeowners insurance you get when you’re not able to find coverage through a typical insurance company. Since they're typically more expensive and have lower coverage limits than standard home insurance policies, FAIR Plans are a good last-resort option for homes that don’t qualify for a standard policy.
These policies are often necessary in natural disaster-prone areas where homeowners insurance is hard to come by, including Florida, California, Louisiana, and Texas.
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.
What states offer FAIR Plan insurance?
The following states offer some form of FAIR Plan coverage to homeowners considered too high risk to qualify for insurance on the standard market.
FAIR Plan insurance coverage varies by state, but at the very least it usually includes dwelling coverage. 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 sometimes aren’t even offered at all.
But in some 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]
Example of coverage provided by a Texas FAIR Plan policy
Here's an example of how much coverage you can purchase through the Texas FAIR Plan: [2]
Covers your temporary living expenses while your home is being repaired or rebuilt
10% of dwelling limit
FAIR Plan insurance statistics
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.
33 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 [3]
The number of homeowners in Texas who received insurance through the state’s FAIR Plan decreased by 7% in 2021 [4]
Over 10% of Florida homeowners have insurance through the state’s FAIR Plan sold through Citizen’s Insurance as of March 2022 — and that number is only expected to rise [5]
See if you qualify for FAIR Plan home insurance coverage
Your home has old plumbing, outdated electrical wiring,a bad roof, or other characteristics that make it at heightened risk of damage
Bad claims history
Your home has a lengthy loss history, meaning several insurance claims have been filed at the residence in the past
What to do before applying for FAIR Plan insurance
If you’re getting denied homeowners insurance on the standard market, follow these steps before applying for coverage through your state's FAIR Plan:
Talk to the insurance company
If 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. 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're insured with. If an insurance company is willing to insure the house down the street from you, then they may be willing 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 to get a list of private insurers who provide homeowners insurance in your area.
Are you eligible for FAIR Plan insurance?
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 your state
Here's a list of FAIR Plan resources and contact information for each state:
FAIR Plans are generally more expensive than a standard homeowners insurance policy, which costs around $1,899 per year, according to our analysis of home insurance rate data from across the country.
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.
References
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
Pat Howard is a managing editor and licensed home insurance expert at Policygenius, where he specializes in homeowners insurance. His work and expertise has been featured in MarketWatch, Real Simple, Fox Business, VentureBeat, This Old House, Investopedia, Fatherly, Lifehacker, Better Homes & Garden, Property Casualty 360, and elsewhere.
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.
