What is the FAIR plan and how does it work?

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Asked January 9, 2012

2 Answers


Fair Plan in Texas is a State controlled insurance company that issues policies to homeowners that are unable to obtain coverage for their homes with standard insurance companies. The way it works is your Agent will attempt to place your home with better companies and if you are declined for age of home, ineligible roof type, claims, company not issuing policies in the area, credit score, etc you can be placed with Fair Plan as a last result. Your premium will be reasonable, however you may want to verify what is covered and see what added features are available; such as, water damage and mold.

Answered June 21, 2016 by inm2016


FAIR is a comprehensive initiative to provide essential insurance coverage to homes and businesses in regions which may not make insurance for certain perils available. FAIR is primarily a flood insurance program, but variations exist for other high risk disasters as well, such as hurricane or earthquake insurance. FAIR is managed at the state level, but it is part of flood disaster program created by the National Flood Insurance Program, or NFIP.

Flooding is often a widespread calamity, reaching across state lines and causing damages in staggering numbers. Because the danger of flooding is such a high risk, flood insurance is not part of a standard home insurance policy, and must be purchased separately. It may be possible to get flood insurance from high risk insurers, but area where the risk is highest may not even have that. In those cases, the FAIR plan is the homeowner's last resort for flood insurance.

The way the plan works is relatively simple. All insurance companies which are licensed to sell home insurance in that state are required to participate in the program, and the collective insurance is then distributed as needed to home and business owners. The coverage is expensive, but flooding is a very real danger in almost every state and FAIR and related programs may be the only option available.

Before you can qualify for special flood insurance plans, you will be required to make a good faith effort to secure the coverage through traditional channels. Even once you have this type of coverage, you may be required to make periodic searches for coverage through mainstream insurance offerings. The FAIR plan is not meant to be a substitute for home insurance, merely an effort to make sure that catastrophic insurance coverage is available for those who may need it the most.

Answered January 9, 2012 by Anonymous

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