A FAIR Plan is the property insurer you end up with when the regular market says no. In most states the plan is created by law but funded by the property insurers doing business there, who share its losses, so it isn’t a government program, but it isn’t a normal insurance company either: the policy covers a short list of named perils, in some states pays actual cash value, has a coverage cap, and usually leaves out liability and living expenses. More than thirty states and D.C. have one, five coastal states run separate wind pools, and Florida and Louisiana folded both into a Citizens corporation. I treat the plan as a bridge: FAIR Plan for the fire risk, a difference-in-conditions policy for the rest, and a standing search for a carrier to take the whole house back.
Where FAIR Plans came from
FAIR stands for Fair Access to Insurance Requirements. The plans grew out of three years of rioting in American cities beginning with Watts in 1965, after which a presidential advisory panel concluded the cities couldn’t be revitalized without fair access to property insurance. Congress passed the Urban Property Protection and Reinsurance Act of 1968, which authorized states to set up FAIR Plans and made federal riot reinsurance available. NAIC says plans were set up in twenty-six states and the District of Columbia under that act.
A FAIR Plan is created by state law, the insurers writing property insurance in that state are required to participate, and each member shares the plan’s profits, losses and expenses in proportion to its market share. Massachusetts’ plan puts it plainly: no taxpayer dollars are used; it runs on premiums, investment income, reinsurance and assessments on member companies when needed.
How the policy differs from a homeowners policy
Forms vary by state, but the shape is the same: basic property coverage, not a homeowners policy. NAIC’s summary is that a FAIR Plan policy usually includes dwelling coverage, that contents and other structures are usually optional add-ons, and that loss of use and personal liability aren’t offered. What the California plan leaves out.
- Named perils only. The California FAIR Plan dwelling policy covers only damage from the causes of loss listed in it: fire and lightning, internal explosion and smoke, with vandalism and malicious mischief as an option.
- Actual cash value. Most Texas FAIR Plan policies pay actual cash value, replacement cost minus depreciation. Its Homeowners Policy can be endorsed for replacement cost; its Dwelling Policy can’t be.
- A hard cap. California’s residential limit is $3 million, Texas tops out at $1,000,000 of dwelling coverage, and Colorado’s law caps residential property coverage at $750,000. Value above the cap has to be insured somewhere else.
- What’s missing. Water damage, theft and liability are the gaps the California plan names when it points policyholders to a difference-in-conditions policy. Texas is a partial exception: its Homeowners, Condominium and Tenant forms include personal liability and loss of use for additional living expenses; its Dwelling Policy doesn’t.
Which states have one
NAIC says that as of October 2024 thirty-three states had some sort of residual property market plan.
- FAIR Plans. PIPSO data published by the Insurance Information Institute covers FAIR Plans in California, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Texas, Virginia, Washington, West Virginia and Wisconsin. The Hawaii, Mississippi and Texas plans don’t offer a commercial policy.
- Colorado, the newest. Colorado created its FAIR Plan by law in May 2023, after the period that data covers, and the program launched in April 2025.
- Beach and windstorm plans. Alabama, Mississippi, North Carolina, South Carolina and Texas run separate pools for coastal areas. By law the Texas FAIR Plan can’t write windstorm and hail in the designated catastrophe area of 14 coastal counties and part of Harris County on Galveston Bay; owners there get that coverage from the Texas Windstorm Insurance Association.
- Citizens-type corporations. Florida and Louisiana combined their FAIR and beach plans into a Citizens Property Insurance Corporation each. Florida’s was created by the Legislature in August 2002 as a not-for-profit, tax-exempt government entity, the exception to the industry-run model.
Who qualifies, and who pays when a plan loses money
Every plan is a market of last resort, so eligibility starts with being turned down, and the test varies by state. Texas requires declinations from at least two insurers actually writing property insurance there, rules out anyone with a current policy, a renewal offer or a valid offer of comparable coverage, and makes policyholders reapply to the regular market every two years. Florida’s Citizens writes eligible owners who can’t find coverage in the private market and works to move them back out.
Because the money comes from the industry, a bad year lands on the member insurers and sometimes on policyholders. After the January 2025 Southern California wildfires, California’s commissioner approved a $1 billion assessment on the FAIR Plan’s member insurers in February 2025 and let them pass half of it to their own customers as a temporary supplemental fee. Florida law requires Citizens to levy assessments on most Florida policyholders, not just its own, if it runs a deficit after a devastating storm or series of storms.
Pairing it with a DIC policy, and how I use it
A FAIR Plan policy by itself leaves the house exposed to everything the plan doesn’t name: water damage, theft, liability and, in most plans, the cost of living elsewhere during repairs. The fix is a difference-in-conditions policy from a regular insurer. The California FAIR Plan describes DIC policies as providing coverages it doesn’t, such as water damage, theft and liability. The plan doesn’t sell them; it sends policyholders to their broker. The California pairing in detail.
A FAIR Plan is a bridge, not a destination. When a carrier non-renews a house, I collect the declinations the plan requires, bind the plan for the peril the market won’t take, bind the DIC for the rest, and keep the file open. Texas makes policyholders re-shop every two years and Florida pushes policies back to private carriers; I re-shop sooner than either. What a standard homeowners policy covers and how high-value homes are placed state by state.
Common questions
Is a FAIR Plan run by the state?
In most states, no. The plan is created by state law but funded by the insurers required to join it, who share its profits and losses by market share; Massachusetts says no taxpayer dollars are used in its plan. Florida’s Citizens is the exception: it was created as a not-for-profit government entity.
What is a beach or windstorm plan?
A residual pool for coastal areas. Alabama, Mississippi, North Carolina, South Carolina and Texas run one; in Texas it writes the windstorm and hail coverage the FAIR Plan can’t in 14 coastal counties and part of Harris County. Florida and Louisiana combined theirs with their FAIR Plans into Citizens.
How do I qualify for a FAIR Plan?
By being turned down, with the details varying by state. Texas wants declinations from at least two insurers actually writing property insurance there and no valid offer of comparable coverage; Florida’s Citizens takes owners who can’t find coverage in the private market. The Texas plan can still decline a vacant home or one in disrepair.
Can I be assessed as a policyholder?
Sometimes. Florida law requires Citizens to levy assessments on most Florida policyholders, not just its own, after a storm deficit. California assessed its member insurers $1 billion in 2025 and let them pass half to their customers as a temporary fee. Ask how your state’s plan handles it.
Does a FAIR Plan cover flood or earthquake?
Not in California. Its dwelling policy covers named perils such as fire, lightning, internal explosion and smoke, and the plan tells policyholders to consider separate flood and earthquake policies alongside a DIC policy. Read your own state’s plan forms before assuming either is included.
Sources
- NAIC Center for Insurance Policy and Research: Fair Access to Insurance Requirements (FAIR) Plans (topic page, updated December 2024)
- Insurance Information Institute table of PIPSO data: insurance provided by FAIR Plans by state, fiscal years 2009–2024
- Insurance Information Institute table of PIPSO data: insurance provided by beach and windstorm plans by state, 2013–2023
- Massachusetts Property Insurance Underwriting Association (Massachusetts FAIR Plan): about us
- California FAIR Plan: about the FAIR Plan
- California FAIR Plan: dwelling policy
- California FAIR Plan: Difference in Conditions (DIC)
- California Department of Insurance: California FAIR Plan consumer page (coverage limits)
- California Department of Insurance press release, February 11, 2025: FAIR Plan assessment after the Southern California wildfires
- Texas FAIR Plan Association: summary description of TFPA coverages
- Texas FAIR Plan Association: coverage eligibility
- Colorado General Assembly: HB23-1288, Fair Access To Insurance Requirements Plan (bill summary)
- Colorado Springs Gazette (news report), August 18, 2025: demand for Colorado’s new FAIR Plan
- Citizens Property Insurance Corporation (Florida): who we are
General information about FAIR Plans, beach and windstorm plans and Citizens-type residual property insurers as of October 2026, not legal or tax advice; each state’s statute, plan of operation and current policy forms control. Coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued.