What You Need to Know About FAIR Plan Insurance

A homeowner’s insurance coverage gives you peace of mind and protection for your house and personal belongings against certain types of losses outlined in your policy. If you live in a high-risk area, however, you may face a difficult time getting insurance for your property.

Whether your home is in a city with a high crime rate or an area that’s prone to tornadoes, hurricanes, and other natural disasters, you’ll encounter many insurers declining your application. The good news is you have options.

If you’re unable to get insurance in the private market, you can obtain coverage via your state’s Fair Access to Insurance Requirements (FAIR) plan.

FAIR Plan Insurance: An Overview

Created in the 1960s, this state-mandated program made sure that homeowners living in high-risk locations still had an opportunity to buy some insurance coverage. This “last resort” coverage is more expensive and offers less coverage than private insurance.

A majority of states offer a FAIR plan, including California, Florida, Texas, and New York. Private insurers partially subsidize this plan in a system called the shared or residual market.

Rather than let a single insurance firm take on a high-risk residential property, multiple sources come together to cover the risk collectively. If a devastating earthquake, for instance, strikes and a FAIR plan policyholder files a claim, the participating insurers will cover the loss. 

Coverage of the FAIR Plan

FAIR plans typically cover loss resulting from riots, fire, vandalism, and windstorm. The specifics of the insurance coverage, however, vary depending on your location. Georgia’s FAIR plans, for instance, provide hail and wind coverage for some homeowners living in high-risk coastal communities.

The coverage limit of many FAIR plans ranges from $500,000 to $600,000. Some states may throw in optional coverage, such as personal property coverage, up to a certain amount.

FAIR Plan Eligibility Requirements

You have to meet certain conditions before you can get a FAIR plan policy. Simply living in a high-risk area doesn’t guarantee automatic approval.

You may be required to mitigate your risk of water damage, fire damage, and theft by doing the following:

  • Make repairs, such as fixing your electrical wiring and roofing system
  • Install water backup valves
  • Install an alarm and anti-theft devices

The FAIR plan administrator of your state reserves the right to deny your application if you fail to correct conditions that make your residential property more susceptible to losses.

How to Apply for a FAIR Plan

Most states will require you to apply through a private insurance agent. This person will help you fill out your FAIR plan application and answer concerns you may have regarding this program.

You can also get in touch with your state’s insurance department to learn more about the specific requirements in your area.

Knowledgeable & Professional Insurance Firm at Your Service

The FAIR plan is a “last resort” insurance coverage. Before you call your state’s insurance department, try to exhaust your other available options.

Midlands offers an elite homeowners’ policy designed to provide customization and protection that goes beyond a standard policy. We can cover homes in coastal areas, houses with prior losses, and other unique risks.
Fill out our contact form today or call us for more information about our insurance policies.