What Is FAIR Plan Homeowner's Insurance?


Quick Answer

FAIR plans are homeowner's insurance for properties that insurance companies consider to be high risk. FAIR plans often cost more than similar plans for a smaller amount of coverage but may be the only form of insurance available for certain properties.

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Full Answer

The federal government established FAIR plans to legally ensure that some form of home insurance would be available to homes categorized as being "high risk." Though the plans are federally mandated, they are managed by individual insurance companies.

A FAIR plan may be the only option for a property in an area prone to natural disasters, flooding or high crime. Homeowners that have aged plumbing or electrical systems may also have to take out a FAIR plan. FAIR plans have a minimum coverage requirement of losses due to fire, windstorms, riots or vandalism.

Not all states offer FAIR plans. Those that do may have offices that can assist eligible homeowners in obtaining coverage. Some states that do not offer FAIR plans have alternative "Beach and Windstorm" plans that work in a similar manner but are specifically for coastal weather events such as hurricanes, tsunamis and flooding. An insurance agent should be able to determine whether a property is eligible for FAIR coverage.

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