FAIR plan insurance: the insurer of last resort, state by state

Why these plans exist

Where a state has a residual market plan, the insurers writing homeowners coverage there must take part in it: if a home cannot find coverage, the plan they fund offers something. The first FAIR plans, for Fair Access to Insurance Requirements, were set up in the late 1960s for city neighborhoods that insurers avoided. Today they mostly serve homes in wildfire, hurricane and hail areas, older homes and homes with past claims. Their size goes up when the private market pulls back, which is why the nonrenewal rates of an area are the early sign.

Every plan the Treasury report lists

The table follows the appendix of the Treasury report. The descriptions are ours, in short; each plan's site gives its forms, limits and eligibility rules. Where no link is given, the plan's own site could not be reached when this page was built: the state insurance department, linked from each state page, has the contact.

What a FAIR plan policy leaves out

A basic dwelling fire policy covers the named perils and nothing else. Theft, personal liability, water from a burst pipe and loss of use are usually missing, and the limits can be lower than the cost to rebuild. Owners commonly buy a "difference in conditions" policy from a private insurer to fill the gaps; in California this pairing is the usual answer for homes in wildfire zones where the FAIR plan covers fire and a second policy covers the rest. The premium of the FAIR plan plus the second policy is the real cost of insuring the house, and it can be well above the $1,617 median of California's private market in 2022.

The Florida rule for Citizens

Florida's statute (Fla. Stat. 627.351(6)(c)5.a) says a personal lines risk offered coverage by an authorized insurer at a premium no more than 20% above the comparable Citizens premium is not eligible for a Citizens policy. The comparison is for comparable coverage. Citizens runs a clearinghouse that puts private offers in front of applicants and policyholders for that reason. A homeowner who receives a qualifying offer must take it or leave Citizens; above the line, Citizens stays available. The calculator applies the line to the two premiums you enter; Citizens' other rules, such as limits on the value of the home, still apply.

Wildfire country: the California case

California shows how a plan grows. In the Treasury file, the share of policies its insurers declined to renew went from 0.67% in the median ZIP code in 2018 to 1.25% in 2019, and stayed near that level through 2022, while the median premium rose +21.2% after inflation, the largest rise of any state. Owners who were not renewed in the foothills and the mountains turned to the California FAIR Plan for fire coverage and a private policy for the rest. The data in the file end before the later withdrawals of large insurers from new business in the state.

Florida and Louisiana in the private data

Because the Treasury file excludes residual plans, it shows the private market that remains in states where a Citizens plan grew. Florida's median private premium per policy fell from $3,845 in 2018 to $3,211 in 2022, after inflation, as private insurers withdrew from the dearest coastal homes and those homes moved to Citizens. Louisiana's private median rose to $2,438, with a paid loss ratio of 76% in 2021, the year of Hurricane Ida. In both states the figure describes the homes private insurers kept.

Getting out of the plan

A residual plan is meant to be temporary. Ask an independent agent to shop the house each year, especially after replacing a roof, adding storm shutters or clearing brush around the house, since those changes can bring private insurers back. Keep a record of any private offer and the coverage it includes, since in Florida that offer decides eligibility. Compare deductibles too: plan policies and private policies may use different wind deductibles, explained on the hurricane deductible page.