Short answer: The Texas FAIR Plan Association (TFPA) is an insurer of last resort for basic residential property coverage when regular insurers won't write it. You generally need two current declinations from authorized insurers in different insurer groups and no comparable offer. It's meant to be temporary, so you must shop the voluntary market again periodically.
Who the FAIR Plan is for
The FAIR Plan exists for homeowners who have trouble finding coverage because of factors like location, the condition of the home, or claims history. According to the Texas Department of Insurance, insurers of last resort like the FAIR Plan and TWIA help Texans who can't get coverage elsewhere.
Eligibility
According to the Texas FAIR Plan, applicants generally must show:
- Two declinations from authorized insurers that actually write residential property insurance in Texas
- The declining insurers aren't part of the same insurer group
- No valid comparable offer or renewal from the voluntary market
The plan also requires reapplying in the voluntary market periodically, every two years according to TFPA's declination requirements. The property must meet the plan's underwriting standards.
What the FAIR Plan covers
The FAIR Plan offers several residential policy types, which may include:
- Dwelling coverage
- Personal property
- Additional living expenses
- Personal liability, depending on the policy
Coverage is generally more limited than a broad private homeowners policy. Read the policy and compare endorsements.
Wind and hail on the coast
In the TWIA designated coastal area, FAIR Plan policies may exclude wind and hail. Coastal homeowners may need a separate TWIA policy for wind and hail. See Texas windstorm insurance (TWIA) explained.
Flood
Like regular homeowners policies, FAIR Plan policies exclude flood. Separate flood insurance is available through the NFIP and private insurers. See FloodSmart.gov and flood insurance.
FAIR Plan vs. TWIA
| Texas FAIR Plan | TWIA | |
|---|---|---|
| Purpose | Basic residential property coverage | Wind and hail coverage |
| Where | Statewide, where eligible | Designated coastal area |
| Eligibility | Two declinations from different insurer groups | Denial from one authorized insurer, plus certificate of compliance |
How to get back to the voluntary market
- Fix property issues insurers flagged, such as an old roof or outdated wiring
- Keep a clean claims history
- Install protective devices
- Work with an independent broker who can shop many insurers
- Reapply as required
Other states' FAIR Plans
Many states have FAIR Plans with different rules. See our FAIR Plan insurance by state table and what is a FAIR Plan.
Common scenarios
Two insurers declined your older Houston home. You may qualify for the FAIR Plan if you meet its requirements.
Your Galveston home has a FAIR Plan policy that excludes wind. You may need TWIA for wind and hail, plus flood insurance.
An insurer offers you coverage at renewal time. If you have a comparable voluntary offer, you may no longer qualify for the FAIR Plan.
Your roof is in poor condition. The FAIR Plan has underwriting standards too. Repairs may be needed.
Key terms
- Declination: a written refusal from an insurer to issue coverage.
- Voluntary market: regular private insurers.
- Insurer of last resort: a program that provides coverage when the voluntary market won't.
- Insurer group: related insurance companies under common ownership.
Questions to ask your broker
- Have I really exhausted the voluntary market, including surplus lines options?
- What would it take, such as roof replacement or other repairs, to qualify for a standard policy?
- Do I need a separate TWIA policy for wind and hail?
- Should I add a difference-in-conditions or flood policy?
- What liability coverage do I have, since FAIR Plan policies may not include it?
- When is my next chance to move back to a regular insurer?
Answers depend on the property, its location and its condition, so review options at every renewal.
Bottom line
The Texas FAIR Plan is a safety net, not a destination. Use it to stay protected while you work on what made your home hard to insure, and shop the voluntary market regularly. On the coast, remember that wind, hail and flood may need separate policies, and check each one's deductibles and limits so you know exactly how you'd be paid after a storm.
Contact Alishahi Insurance or call (877) 711-4545. See insurance in Texas.
Frequently asked questions
What is the Texas FAIR Plan?
An insurer of last resort that sells basic residential property coverage to Texans who can't get it from regular insurers.
How do I qualify for the Texas FAIR Plan?
Generally with two declinations from authorized insurers in different insurer groups and no comparable offer.
Does the Texas FAIR Plan cover wind and hail on the coast?
In the TWIA area, FAIR Plan policies may exclude wind and hail, so you may need TWIA.
Does the Texas FAIR Plan cover flood?
No. Flood requires separate insurance.
Do I have to leave the FAIR Plan eventually?
You must reapply in the voluntary market periodically and may no longer qualify if you receive a comparable offer.
Alishahi Insurance · 439 N Canon Dr, Penthouse, Beverly Hills, CA 90210 · (877) 711-4545 · CA License #4348151. General information only. This isn't legal, tax or financial advice or a coverage determination. Coverage depends on policy language and underwriting, and rules vary by state.