What exactly is a FAIR Plan?

02 Jan

If you live in an area where severe weather is common, or wildfires pop up every summer you may have trouble finding affordable home insurance coverage. If homes in your area are repeatedly damaged or destroyed by a covered peril, insurers may pull out of the entire area, refusing to write policies in your neighborhood. This is not as uncommon as you may think.

Homeowners in Florida and California have had their policies cancelled or non-renewed due to extreme weather events in the area or wildfires, leaving them unprotected. Fortunately, there are options for homeowners who have been cancelled by their mainstream insurance company. State run, high risk, insurers of last resort FAIR plans are often the only option left for these homeowners. 

Let’s take a quick look FAIR plans and how they work.

What exactly is a FAIR Plan?

If a property owner cannot get coverage in the private market, FAIR plans step up to insure these unlucky homeowners. FAIR stands for Fair Access to Insurance Requirements (FAIR).

FAIR plans are designed to offer coverage in areas that have extremely high risks and where insurers have pulled out of the market and are no longer writing policies in that area. 

There are a number of reasons your home could be considered extremely high risk but, in most cases, it is due to severe weather or fire risk. Here are a few common risks that could result in your home being uninsurable:

  • Severe weather is common: hurricanes, windstorms, hail and tornadoes 
  • High crime area
  • Old homes with outdated plumbing, heating or electrical that are deemed unsafe by your insurer

FAIR plans tend to offer lower coverage levels and come with a fairly high premium compared to private insurance but in most cases, a FAIR plan is the only option available to these homeowners.

How do You Qualify for a FAIR Plan?

FAIR plans are not designed for people who are unhappy about their high insurance bill and are simply looking for less coverage at a lower price. FAIR plans are considered the “insurer of last resort” and in most cases you have to meet certain eligibility requirements to purchase a FAIR plan policy. 

While eligibility requirements vary by state, here are a few of the more common ones:

  • Property improvements: Property improvements are often required to minimize fire risk, water damage or theft. This may include laddering trees close to the house, installing storm shutters, moving mechanicals off the ground if flooding is a risk or replacing your roof with wind resistant materials. 
  • Denied coverage: In many states you must have been denied homeowners insurance coverage by at least two insurance companies before you can apply for a FAIR plan policy.
  • Lien free: Your property must not have any outstanding tax bills, liens, assessments or penalties lodged against it. 
  • Have to shop coverage: Most FAIR plans require you to reapply for coverage in the private market every two years to see if you now qualify for coverage.

Which States Have FAIR plans?

FAIR plans are often set up in states where severe weather can be an issue. The following states have FAIR plans:

StateState FAIR Plan and Website LinkPhoneRates
Alabama Alabama Insurance Underwriting Association334-943-4029Home Insurance Rates in Alabama
California  California FAIR Plan Association213-487-0111Home Insurance Rates in California
Connecticut  Connecticut FAIR Plan860-528-9546Home Insurance Rates in Connecticut
Delaware  Insurance Placement Facility of Delaware215-629-8800Home Insurance Rates in Delaware
District of Columbia  District of Columbia Property Insurance Facility202-393-4640
Florida Citizens Property Insurance Corporation [Florida]850-513-3700Home Insurance Rates in Florida
Florida Windstorm Underwriting Association904-296-6105
Georgia  Georgia Underwriting Association770-923-7431Home Insurance Rates in Georgia
Hawaii Hawaii Property Insurance Association808-531-1311
Illinois  Illinois FAIR Plan Association312-861-0385Home Insurance Rates in Illinois
Indiana  Indiana Basic Property Insurance Underwriting Association317-264-2310Home Insurance Rates in Indiana
Iowa  Iowa FAIR Plan Association515-255-9531Home Insurance Rates in Iowa
Kansas  Kansas All-Industry Placement Facility785-271-2300Home Insurance Rates in Kansas
Kentucky  Kentucky FAIR Plan Reinsurance Association502-425-9998Home Insurance in Kentucky
Louisiana Louisiana Citizens Property Insurance Corporation504-831-6930Home Insurance Rates in Louisiana
Maryland  Maryland Joint Insurance Association410-539-6808Home Insurance Rates in Maryland
Massachusetts  Massachusetts Property Insurance Underwriting Association617-723-3800Home Insurance Rates in Massachusetts
Michigan  Michigan Basic Property Insurance Association313-877-7400Home Insurance Rates in Michigan
Minnesota  Minnesota FAIR Plan612-338-7584Home Insurance Rates in Minnesota
Mississippi  Mississippi Windstorm Underwriting Association601-981-2915Home Insurance Rates in Mississippi
Missouri  Missouri Property Insurance Placement Facility314-421-0170Home Insurance Rates in Missouri
New Jersey  New Jersey Insurance Underwriting Association973-622-3838Home Insurance Rates in New Jersey
New Mexico  New Mexico Property Insurance Program505-878-9563
New York  New York Property Insurance Underwriting Association212-208-9700Home Insurance Rates in New York
North Carolina North Carolina Joint Underwriting Association – FAIR Plan800-662-7048Home Insurance Rates in North Carolina
Ohio  Ohio FAIR Plan Underwriting Association614-839-6446Home Insurance Rates in Ohio
Oregon  Oregon FAIR Plan Association503-643-5448Home Insurance Rates in Oregon
Pennsylvania  Insurance Placement Facility of Pennsylvania215-629-8800Home Insurance Rates in Pennsylvania
Rhode Island  Rhode Island Joint Reinsurance Association617-723-3800Home Insurance Rates in Rhode Island
South Carolina  South Carolina Wind and Hail Underwriting Association803-737-6180Home Insurance Rates in South Carolina
Texas  Texas FAIR Plan Association 800-979-6440Home Insurance Rates in Texas
Texas Windstorm Insurance Association 800-979-6440Home Insurance Rates in Texas
Virginia  Virginia Property Insurance Association804-591-3700Home Insurance Rates in Virginia
Washington  Washington FAIR Plan425-745-9808Home Insurance Rates in Washington
West Virginia  West Virginia Essential Property Insurance Association215-629-8800
Wisconsin  Wisconsin Insurance Plan414-291-5353

Coverage Levels with FAIR Plans

FAIR plans are designed as a last resort for insurance and do not offer the robust coverage options you would normally get with a standard policy. Here are some of the coverage options that a typical FAIR plan would offer:

Dwelling coverage: This is the main coverage of any homeowners policy and pays to rebuild or repair your home’s structure after a covered peril. In many cases, FAIR plans limit covered perils to fire, windstorm, vandalism, and riots. A standard homeowner policy would cover more perils. In addition, some FAIR plans limit the amount of coverage you can purchase, which means you may need to purchase additional coverage in the private market if possible. 

Contents coverage: This coverage will pay to replace your personal belongings that are damaged or destroyed by a covered peril. Again, FAIR plans often limit the perils covered. 

Liability coverage: Liability coverage will help cover medical bills or property damage to others that you are legally liable. This can relate to falls or slips on your property that injure a guest. FAIR plans may limit your liability coverage, most experts recommend carrying at least $300,000 in liability coverage. If your FAIR plan limits liability coverage you may need to look at an umbrella policy to up your liability protection. 

Other Coverages: It is possible that the FAIR plans in your state may offer additional coverage for outbuildings or other structures on the property as well as debris removal coverage or even ordinance coverage. It is important to remember that almost all FAIR plans, exclude flood and earthquake damage so if you are in an area where this is an issue, you may need to purchase a separate flood or earthquake policy. 

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