FAIR Plan home insurance

FAIR Plan insurance explained

A FAIR Plan, which stands for Fair Access to Insurance Requirements, is a program that allows high-risk homeowners to purchase home insurance. People who get insurance through a FAIR Plan are typically not eligible for coverage through the standard home insurance market because their home is located in a high-risk area or they have other red flags that concern insurers.

FAIR Plans are state-run programs that are subsidized by private insurance companies. A FAIR Plan is slightly different from a typical home insurance company because it is a shared market plan. Rather than getting coverage from a single insurance company, several insurance companies cover your property in a FAIR Plan, limiting the amount of risk that one company assumes. If you have to file a claim, every participating company pays for a portion of your loss.

When it comes to the actual coverage, homeowners insurance through a FAIR Plan is pretty limited. Many plans may only include dwelling and personal property coverage on a named perils basis. You most likely cannot get liability, medical payments or loss of use coverage through a FAIR Plan. Most states’ FAIR Plans only insure homes at actual cash value, as opposed to replacement cost value.

FAIR Plan home insurance is intended to be a last-resort option. You cannot apply for home insurance through your state’s FAIR Plan as your first option because you will have to prove that you have been denied home insurance from several private companies.

High-risk homes and FAIR Plans

FAIR Plans specifically cover high-risk homes and high-risk homeowners. However, the criteria for what is considered a high-risk home is very specific. Here are some of the characteristics of a high-risk home that may qualify you for FAIR Plan insurance:

• You live in an area with a high risk of severe weather, like tornadoes, hurricanes or earthquakes.
• You live in a neighborhood with a high rate of crime, vandalism or theft.
• Your home is very old and has outdated systems that make it risky to insure, like old plumbing or electrical wiring.

FAIR Plans also serve homeowners with a lengthy claims history. If you’ve filed more than a few insurance claims, especially major ones, it may be a red flag for insurance companies. When you apply for a new policy, the insurance company can review your Comprehensive Loss Underwriting Exchange (CLUE) report, which includes a record of the insurance claims you’ve filed. A spotty claims record can make it difficult to get preferred coverage, so you might have to resort to a FAIR Plan if you fall into this category.

Although you may be able to find private insurance companies willing to insure high-risk homes, it’s becoming more difficult in some states. For example, a number of home insurance companies in Florida are shutting down and canceling policies due to the uptick in natural disasters, expensive claim payouts and fraudulent claims. Therefore, more Florida homeowners may need to consider a FAIR Plan due to the difficulty in finding standard coverage. In the midst of California’s home insurance crisis, an increasing number of homeowners across the state have been forced to rely on the state’s FAIR Plan.

How to get FAIR Plan home insurance

The process of getting FAIR Plan insurance is different in every state, but is usually straightforward. You must be able to prove that you have been denied home insurance from at least two private home insurance companies, but some states may require more denials. To be eligible for the FAIR plan, you must not owe any outstanding taxes, and there must not be any penalties, liens or assessments on your property. Your home must also be in accordance with local building, housing, sanitation or pollution laws.

Keep in mind that some states require FAIR homeowners insurance customers to apply for private home insurance once per year or every two years, depending on your state. If approved, you will no longer be eligible for the FAIR Plan home insurance.

States that offer FAIR Plan insurance

Not every state offers a FAIR Plan, but many do, especially states with a high rate of severe weather. As of 2022, the most recent year with data available, 33 states and Washington D.C. offer or plan to offer FAIR Plans to high-risk homeowners.

1. Alabama
2. California
3. Connecticut
4. Delaware
5. Florida
6. Georgia
7. Hawaii
8. Illinois
9. Indiana
10. Iowa
11. Kansas
12. Kentucky
13. Louisiana
14. Maryland
15. Massachusetts
16. Michigan
17. Minnesota
18. Mississippi
19. Missouri
20. New Jersey
21. New Mexico
22. New York
23. North Carolina
24. Ohio
25. Oregon
26. Pennsylvania
27. Rhode Island
28. South Carolina
29. Texas
30. Virginia
31. Washington
32. Washington, D.C.
33. West Virginia
34. Wisconsin

Frequently asked questions