FAIR Plan homeowners insurance covers those who live in high-risk areas and cannot secure a policy from insurance companies. FAIR Plans also protect homeowners in disaster-prone areas that experience frequent wildfires, storms or other significant risks. To be eligible, the homeowner must prove that they have attempted and failed to obtain insurance from other providers on multiple occasions. Each state has its own criteria and procedures, but generally, the property must be well-maintained.
What Is a FAIR Plan and When Do You Need It?
A FAIR (Fair Access to Insurance Requirements) Plan provides insurance to homeowners in high-risk areas who cannot secure coverage through insurers. It’s a last resort when you can’t get approval from insurance companies.
Mark Fitzpatrick
Head of Insurance, MoneyGeek
Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including [CNBC](https://www.cnbc.com/2020/04/15/cant-keep-up-with-insurance-premiums-heres-what-to-do.html), [NBC News](https://www.nbcnews.com/business/autos/flooded-cars-are-problem-their-owners-future-car-buyers-n1278493) and [Mashable](https://mashable.com/article/tesla-insurance-rates). Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.
Denise Cristobal
Content Editor
Denise Cristobal is a MoneyGeek content editor with over 14 years of experience in writing, proofreading and copy editing. She has worked with various nonprofits (Chamber of Commerce, Environmental Conservation and Education and Literacy Development) to develop content that furthers their goals and causes. Denise has written on topics including women’s issues, mental health and fitness, among others.
Mark Fitzpatrick
Head of Insurance, MoneyGeek
Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including [CNBC](https://www.cnbc.com/2020/04/15/cant-keep-up-with-insurance-premiums-heres-what-to-do.html), [NBC News](https://www.nbcnews.com/business/autos/flooded-cars-are-problem-their-owners-future-car-buyers-n1278493) and [Mashable](https://mashable.com/article/tesla-insurance-rates). Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.
Denise Cristobal
Content Editor
Denise Cristobal is a MoneyGeek content editor with over 14 years of experience in writing, proofreading and copy editing. She has worked with various nonprofits (Chamber of Commerce, Environmental Conservation and Education and Literacy Development) to develop content that furthers their goals and causes. Denise has written on topics including women’s issues, mental health and fitness, among others.
Updated: October 3, 2024
Advertising & Editorial Disclosure
Key Takeaways
FAIR Plans offer essential insurance for homeowners unable to secure traditional coverage due to high-risk property locations.
These plans typically cover basic perils like fire and wind but exclude flooding, earthquakes and personal liability.
Alternatives to FAIR Plans include enhancing home safety features, seeking specialty insurers or joining group insurance schemes.
How a FAIR Plan Works and What It Covers
Once a homeowner has demonstrated repeated rejections by private insurers, they can apply for a FAIR Plan. These plans are not comprehensive like traditional homeowner's insurance. Instead, they provide basic coverage to ensure financial protection only against specific perils such as:
- Fire damage, including loss from wildfire
- Windstorm damage, particularly in hurricane-prone areas
- Hail damage, often significant in various regions
- Explosions, which might not be covered under basic policies
- Vandalism and malicious mischief, providing security in high-risk areas
Typically managed by a state’s insurance pool, FAIR Plans are crucial for maintaining financial stability in areas susceptible to frequent or severe environmental challenges.
Who Needs a FAIR Plan
Homeowners living in high-risk areas can benefit the most from FAIR Plans, along with those who have been denied coverage by multiple insurance companies. This insurance becomes essential for the following individuals when traditional policies are not viable options:
Homeowners in High-Risk Areas
Homeowners who own homes located in regions prone to frequent natural disasters, such as wildfires, hurricanes, floods or earthquakes, may need a FAIR plan due to the heightened risk associated with their property's location.
Property Owners With Previous Claims
Individuals with a history of filing numerous insurance claims are often denied by standard insurance companies or charged exorbitant premiums due to perceived increased risk.
Property Owners With Risky Properties
Individuals who own properties with conditions that are considered high-risk by insurance companies may need a FAIR plan. These properties include older homes with outdated electrical or plumbing systems or structures built in areas with poor drainage or unstable soil.
Residents in Areas With Limited Insurance Options
People who live in regions where insurance carriers have limited presence or have withdrawn coverage due to regulatory issues may have few alternatives for obtaining insurance coverage and turn to a FAIR plan.
Individuals Needing Immediate Coverage
Those who require immediate insurance coverage but cannot find affordable options in the standard insurance market can opt for a FAIR plan. This could include individuals purchasing homes or properties in high-risk areas or facing policy cancellations or non-renewals.
What FAIR Plans Don't Cover
FAIR Plans often provide limited coverage compared to standard homeowners' insurance policies, focusing primarily on certain perils. These plans typically do not cover risks like flooding or earthquake damage, which require separate policies.
- Flood Damage: You need a separate flood insurance policy to cover flood damage.
- Earthquake Damage: This also requires a separate policy.
- Personal Property Loss: Damage or lost personal items are not covered unless specifically added with additional premiums.
- Liability Coverage: Injuries or damages to others on your property are generally not covered by FAIR plans.
- Maintenance Issues: Most property insurance plans don't cover normal wear and tear or lack of maintenance.
Apart from these perils, FAIR Plans may exclude coverage for personal property or only provide it as an optional addition at an extra cost.
How to Get a FAIR Plan
Obtaining a FAIR Plan involves several steps — initially, homeowners must provide evidence that they have been denied coverage by at least one or more traditional insurers. Once applicants fulfill this prerequisite, they can approach the FAIR Plan program available in their state. It's important to carefully review the coverage details and limitations, as these plans should ideally be considered a last resort due to their often limited and specific scope of protection. Below are the steps to getting a FAIR plan:
Prepare Documentation of Rejections
Collect and prepare documentation of insurance denials from traditional insurers to prove eligibility.
Contact Your State’s FAIR Plan
Each state has its own FAIR Plan administration. Find contact details for the appropriate office and request application forms.
Review Plan Details
Before applying, thoroughly review the FAIR Plan's coverage and exclusions to ensure it meets your needs for basic property insurance.
Submit an Application
Complete the application process, including providing details about your property and insurance history.
Have a Property Inspection
Typically, the FAIR Plan requires an inspection to ensure a property meets basic safety and maintenance standards.
Finalize Coverage
If approved, finalize the details of your coverage and make any necessary premium payments to start your policy.
Alternatives to FAIR Plans
If you find FAIR Plans too restrictive or prefer more comprehensive coverage, there are several homeowners insurance alternatives to consider, such as improving your home's safety and security features. This can make your home more insurable to traditional carriers, potentially qualifying you for standard policies.
- Enhancing Home Safety: Upgrade your home’s structural integrity and install safety devices to reduce perceived risks and appeal to standard insurers.
- Specialty Insurers: Look for companies specializing in high-risk properties; they often have policies tailored for such situations.
- Group Insurance Schemes: Participate in community or group insurance plans, if available, which may offer better terms through collective negotiation.
- Risk Pooling Companies: Some states have risk pools for homeowners who can't find coverage elsewhere, providing an alternative to both FAIR Plans and traditional insurance.
FAQ
When considering a FAIR Plan for property insurance, homeowners often have several questions about how these plans work, the costs and the coverage. We answered some frequently asked questions to clarify aspects not typically covered in the main discussions about FAIR Plans.
Yes, you can cancel your FAIR Plan anytime if you find more comprehensive coverage through a traditional insurance provider. It's important to ensure there is no lapse in coverage between policies.
The cost of a FAIR Plan can vary significantly based on the property's location, the inherent risk factors and the coverage limits set. Generally, FAIR Plans might be more expensive than standard policies due to the high-risk nature of the insured properties.
Each state's FAIR Plan has unique rules and coverage limitations based on regional risk factors and legislative requirements. It's crucial to consult with your state's insurance department for specific details.
While primarily designed for residential properties, some states offer FAIR Plan coverage for commercial properties under certain conditions. Business owners should check with their state’s plan to understand eligibility and coverage options.
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About Mark Fitzpatrick
Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.
Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.