Sometimes, life simply isn’t fair. Through no fault of your own, the location where you live might make it more difficult to get homeowners insurance.
For example, if crime is rising in your neighborhood or you live in an area prone to extreme weather events, standard insurance companies may be reluctant to sell a policy to you.
Fortunately, FAIR Plan insurance policies are there for you as an insurer of last resort. Various programs across the country provide home insurance for owners of high-risk properties who have trouble finding coverage in the standard market.
Find out more about your options for FAIR Plan homeowners insurance, including how it works and what types of coverage are available.
What is FAIR Plan insurance?
Homeowners insurance companies sometimes are reluctant to sell policies to homeowners whose homes pose a higher risk.
In many cases, this increased level of risk is due to factors beyond the homeowner’s control. For example, your home may be located in an area prone to nasty and damaging weather, such as hail, hurricanes, tornados or windstorms.
Rising crime and vandalism in your neighborhood also may make your home riskier to insure.
In other cases, your home itself can be the source of increased risk. For example, a home with old plumbing or an outdated electrical system can raise the risk of water or fire damage.
In all of these cases, a homeowner might struggle to find an insurance policy on the standard homeowners insurance market. Fortunately, states have created their own individual Fair Access to Insurance Requirements (FAIR) plans to offer insurance coverage to homeowners.
What does FAIR Plan insurance cover?
What do FAIR Plans cover? Every FAIR plan home insurance policy covers the basics, including damages from:
According to the Insurance Information Institute, around a dozen states have FAIR plans with some form of a standard homeowners policy, which includes liability coverage.
In addition to FAIR plans, some states have other ways for homeowners to buy insurance coverage they cannot get through a standard policy:
- Beach and windstorm plans — These plans offer coverage for damage by windstorms in coastal areas where standard home insurance excludes windstorm damage.
- State-run plans — Citizens Property Insurance Corporation in Florida and Louisiana Citizens Property Insurance Corporation are nonprofits that provide property insurance throughout those states to owners who can’t find coverage elsewhere.
Fair access to insurance requirements
FAIR plans are the insurer of “last resort” for those who cannot get coverage elsewhere. You must meet specific requirements to be eligible for this coverage.
When you apply, you may have to show proof that you were unable to find standard coverage. To request coverage from the District of Columbia Property Insurance Facility, for instance, you must submit a copy of the cancellation or nonrenewal statement from your current home insurance carrier, along with your application to the plan.
Most new homeowners insurance applicants through Florida’s Citizens must first seek coverage through a clearinghouse to see if any private options are available. New applicants can purchase policies from Citizens only if they receive no comparable private offers or if the rates offered by private companies are 15% higher than those offered by Citizens.
To secure FAIR Plan coverage, you must make improvements that lower your insurance risk in specific ways, such as reducing the potential for fire, theft or water damage. This might include:
- Upgrading electrical wiring, heating or plumbing systems
- Repairing the roof
- Improving security features within the home
How FAIR Plan insurance works for high-risk homes?
FAIR plans began in the 1960s. They are insurance pools that provide a coverage option for homeowners who cannot find insurance any other way.
Many FAIR plans now offer coverage in both urban and coastal areas or throughout their states. The associations that issue FAIR plans are nonprofit groups supported by private insurance companies operating in those states.
While these plans can be a lifesaver for homeowners who cannot get coverage elsewhere, FAIR Plan coverage comes at a price. FAIR Plan coverage tends to be more expensive than standard insurance coverage and may offer less robust protection.
The Connecticut FAIR Plan, for instance, offers basic liability and property coverage for named perils such as fire. Still, the policies do not cover theft, freezing, water damage and some other risks.
In Louisiana, the state government mandates that coverage offered through its Citizens Property Insurance Corporation be more expensive than that offered by private insurance companies.
Because of the limitations and expense of FAIR Plan coverage, it always makes sense to secure basic property insurance through the standard homeowners insurance market if possible. So, before you throw up your arms, try these strategies:
- Work with a savvy insurance agent to try to find standard coverage with the best home insurance companies.
- Check with the company that insures your cars or previously insured your home.
- Talk to your neighbors about which companies insure their homes.
- If your house is considered risky because of its condition rather than the location, find out what you can do to make it more insurable.
Don’t give up on the standard market even after getting coverage from an insurer of last resort.
“We recommend that all FAIR Plan policyholders shop for a different insurer at least annually to search for coverage that is more comprehensive than that offered by the FAIR Plan,” the California FAIR Plan Association states on its website.
Find FAIR Plan homeowners insurance
Finding FAIR insurance coverage is not too difficult if you know where to look. To make things easier, we have rounded up a list of such plans by state and have included a link to each program’s website, as well as a telephone number.
FAIR Plan home insurance by state
Florida FAIR Plan
Citizens Property Insurance Corporation of Florida provides Florida FAIR Plan insurance. It offers homeowners coverage for site-built homes, condominiums and manufactured homes. Renters also can get coverage through Citizens.
A typical Citizens homeowners policy covers the building, other structures on the property, and the owner’s personal property. The policy also includes personal liability and additional living expense coverages. Other policies are available that provide less extensive coverage.
Because hurricanes and tropical storms regularly crash into Florida, Citizens also offers wind-only policies. The Citizens website features a calculator that can tell you if you are eligible for this coverage.
Georgia FAIR Plan
The Georgia Underwriting Association provides Georgia FAIR Plan policies to those who cannot get standard homeowners insurance in the Peach State. It offers a homeowners policy, dwelling fire policy, and wind and hail policy.
Illinois FAIR Plan
The Illinois FAIR Plan Association provides Illinois FAIR Plan insurance. Available policies offer coverage similar to what is available in the standard market, ranging from protection against many types of hazards (including fire, wind and hail, as well as others) to vandalism and “malicious mischief.”
Policies also offer protection against burglary and theft and provide personal liability coverage. An endorsement for earthquake insurance is available with a 5% deductible.
You can pay the policy in full at once or use up to five installments to pay your premium.
Final thoughts on FAIR Plan insurance
The FAIR Plan definition is simple: This is coverage that many states offer to those who cannot secure a homeowners insurance policy in any other way.
These plans have significant limitations. They typically provide less coverage than standard insurance policies, but they are also more expensive. So, it always makes sense to shop for a standard homeowners insurance policy first.
However, if you cannot find coverage in any other way, a FAIR plan can be a lifeline that keeps you and your home protected in the event of future losses.