If your house is considered too high-risk by standard homeowners insurance companies, getting home insurance can be difficult. If you find yourself in this bind, you could qualify for a state-sponsored FAIR home insurance plan. The FAIR plan may provide you with minimum home insurance when no other homeowners insurance coverage options are available. While the FAIR plan is certainly better than no home insurance at all, it is much more limited in what coverage it provides than a standard homeowners insurance policy. This article covers:
- What the FAIR plan is
- The definition of a high-risk home
- Are you eligible for a FAIR plan?
- Where to get high-risk insurance
What is a FAIR plan?
The Fair Access to Insurance Requirements (FAIR) plan is a state-mandated home insurance policy that is a last resort for homeowners who cannot find home insurance through standard home insurers. If you live in an area prone to crime or severe weather, finding home insurance coverage can be challenging.
Since home insurance is usually required by your mortgage lender, being without homeowners insurance puts you in a difficult position. The FAIR plan provides an option to get you home insurance when all else fails.
A single home insurance company is normally reluctant to cover a high-risk home. With the FAIR plan, this is resolved by more than one insurance company coming together to provide you a high-risk, non-standard home insurance policy as a group. This is also known as a “shared market plan”. This way, if a covered peril occurs, multiple companies contribute to paying out your claim instead of just one.
The first thing you need to know about FAIR plan home insurance is that it is incredibly limited in what coverage it provides. FAIR plan home insurance usually covers damage due to:
Coverage beyond this varies in some states. Check with your insurer to see what your state’s FAIR plan also provides.
You’ll notice this list does not include other common perils like frozen pipes and theft. Given that FAIR plan policies often cost more than standard home insurance, you are paying more for less.
Furthermore, in some states like California and Oregon, a FAIR plan does not cover personal liability. The danger of not having liability insurance for your home cannot be overstated. If someone is injured on your property, you may be responsible for thousands of dollars in medical bills and other costs without liability home insurance.
When is a home considered high-risk?
Home insurers consider a home to be high-risk if factors exist that put the house at higher than average chances for a home insurance claim. These factors include:
- High crime trends: Neighborhoods where break-ins are frequent tend to be very high-risk in particular.
- Natural disasters: Regions of the country with excessive chances of tornadoes or floods often are considered high-risk.
- Claim history: Having a large number of claims over a short period of time can also raise your risk rating. Many home insurers use the CLUE (Comprehensive Loss Underwriting Exchange) database to keep track of personal property claims made, usually up to seven years. If your house comes up in the CLUE database frequently, your home insurer can cancel your coverage or refuse to renew your coverage. This may also make getting a new home insurance policy with another insurer difficult.
- Maintenance: If your house has not been properly maintained, home insurers can deem it high-risk. Home insurers are wary of providing coverage to older homes that have not been taken care of.
Home insurers don’t just look at the location or condition of your home when gauging how at-risk your home is. If you’ve filed multiple claims over many homes, home insurers can decide that you are a high-risk homeowner. In cases such as this, you may not even qualify for a FAIR plan.
FAIR plan eligibility
Since FAIR plan coverage involves a group of home insurers who are providing home insurance knowing you’re a high-risk case, they usually want to know that you’ve first tried every option available to secure standard home insurance. They’ll often ask for documented proof that you could not get home insurance anywhere else before trying to get a FAIR plan. Given the high cost and low coverage of a FAIR plan, you’ll want to check all your options for standard home insurance thoroughly:
- Check with your auto or life insurance company. You may be able to bundle a standard home insurance policy with the insurance policy you already have with them. Even if the premium cost for home insurance is high, the bundle discount can help defray the added cost.
- Ask you neighbors who their home insurer is. If the high-risk factor for your home is crime rate or weather hazards, chances are your neighbors have the same insurance problems you do. If their home insurer can help their high-risk status, they may be able to help you, too.
- Try negotiating with your current home insurance provider. If you agree to a higher deductible, you may be able to get home insurance coverage without resorting to a FAIR plan.
- If you are denied coverage because of certain repairable problems, ask the home insurer what needs to be fixed in order for the house to qualify for standard home insurance.
Along these lines, FAIR plan providers will often have conditions you may have to take care of before they provide home insurance coverage. They will not underwrite a policy just because your home is high-risk. These conditions can include:
- Upgrading electrical wiring
- Repairing your roof
- Improving home security systems
- Installing a new heating system
If these conditions are what is keeping you from getting a standard home insurance policy in the first place, you might as well get them taken care of in order to get standard home insurance. This way you can avoid a FAIR plan altogether.
Where can I get high-risk homeowners insurance?
It’s important to know that not all states have a FAIR plan. They’re primarily restricted to states that have high-risk areas, such as tornado -prone regions of the Midwest and fire-prone states like California. You will want to find out what criteria your state has for getting a FAIR insurance plan. Below is a list of FAIR plan phone numbers where you can find out more about the FAIR plan in your state, and how to apply for one.
FAIR home insurance plans by state
|State FAIR plan||Phone number|
|Alabama Insurance Underwriting Association||866-780-2482|
|California FAIR Plan Association||800-339-4099|
|Connecticut FAIR Plan||860-528-9546|
|Insurance Placement Facility of Delaware||800-462-4972|
|District of Columbia Property Insurance Facility||410-539-6808|
|Citizens Property Insurance Corporation||866-411-2742|
|Georgia Underwriting Association||770-923-7431|
|Illinois FAIR Plan Association||312-861-0385|
|Indiana Basic Property Insurance Underwriting Association||317-692-0564|
|Iowa FAIR Plan Association||515-255-9531|
|Kansas All-Industry Placement Facility||785-271-2300|
|Kentucky FAIR Plan Reinsurance Association||502-327-8909|
|Louisiana Citizens Property Insurance Corporation||888-568-6455|
|Maryland Joint Insurance Association||410-539-6808|
|Massachusetts Property Insurance Underwriting Association (MPIUA)||800-851-8978|
|Michigan Basic Property Insurance Association||313-877-7400|
|Minnesota FAIR Plan||612-338-7584|
|Mississippi Windstorm Underwriting Association||601-981-2915|
|Missouri Property Insurance Placement Facility||314-421-0170|
|New Jersey Insurance Underwriting Association||973-622-3838|
|New Mexico Property Insurance Program||505-878-9563|
|New York Property Insurance Underwriting Association||212-208-9700|
|North Carolina Joint Underwriting Association - FAIR Plan||1-800-662-7048|
|North Carolina Insurance Underwriting Association - Coastal Property Insurance||1-800-662-7048|
|Ohio FAIR Plan Underwriting Association||614-839-6446|
|Oregon FAIR Plan Association||503-643-5448|
|Insurance Placement Facility of Pennsylvania||800-462-4972|
|Rhode Island Joint Reinsurance Association||800-851-8978|
|South Carolina Wind and Hail Underwriting Association||803-779-8373|
|Texas FAIR Plan Association||800-979-6440|
|Texas Windstorm Insurance Association||800-788-8247|
|Virginia Property Insurance Association||800-899-7973|
|Washington FAIR Plan||425-745-9808|
|West Virginia Essential Property Insurance Association||800-462-4972|
|Wisconsin Insurance Plan||414-291-5353|
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