Key takeaways
- A FAIR Plan is usually a fire policy, not a homeowners policy. NAIC says “generally, loss of use and personal liability coverages aren't offered via FAIR plans” — note generally. Texas is a clear exception: the Texas FAIR Plan Association writes homeowners, condominium and tenant policies that provide personal liability, medical payments and loss of use. Check your own state's plan rather than assuming the general case.
- The gap is closed with a separate wrap, or difference in conditions, policy. If nobody has mentioned one to you, that is the question to ask.
- It is not a government program. It is the licensed insurers in your state, sharing losses in proportion to market share, under a state mandate.
- That funding model means a plan's losses reach people who never held one of its policies — in California, the insurance department's published recoupment rules let insurers request half of what they paid from their own policyholders, up to $1 billion of personal-lines assessments and a further $1 billion of commercial ones in a calendar year, and all of anything above.
- Almost nothing here is uniform nationally. Coverage, limits, price and eligibility are state questions, and your insurance department is the authority.
If you have been quoted a last-resort policy, the coverage it leaves out matters more than the price. A licensed agent can tell you what is missing.
Call [PENDING][PENDING]. Calls are answered by [PENDING], a licensed insurance agency (NPN [PENDING]). HomeCoverDesk is not affiliated with any insurer. Calls may be recorded or monitored for quality and training purposes. Our partner does not offer every insurer or every product available in your state.What a state FAIR Plan actually is
FAIR stands for Fair Access to Insurance Requirements. The plans came out of the Urban Property Protection and Reinsurance Act of 1968 — Title XI of Public Law 90-448 — and the problem they were built for was not wildfire — it was insurers refusing to write in whole urban neighborhoods. Twenty-six states and the District of Columbia implemented one under that Act.
The mechanism is worth understanding because it explains almost everything else about how these plans behave. A FAIR Plan is not a state agency and is not funded by taxes. It is an association of the private insurers licensed to write in that state, and each of them shares in its profits, losses and expenses in proportion to their market share. California's regulator puts it plainly: a “private association whose day-to-day operations are controlled by insurance companies, not taxpayers”.
So the plan is the industry insuring what the industry will not insure, under a state mandate. That is why it is priced to discourage rather than to compete, why it is usually narrower than a normal policy, and why it is described as a market of last resort.
| Question | The answer |
|---|---|
| What is it? | A state-mandated property insurance plan that provides coverage to people and businesses who cannot obtain it in the regular market. NAIC's wording. |
| Where did it come from? | The Urban Property Protection and Reinsurance Act of 1968 — Title XI of Public Law 90-448. NAIC's own page calls it the Urban Property Insurance Protection and Reinsurance Act, which is not the statute's name; we repeated that error and corrected it on 23 August 2026. NAIC records plans implemented in twenty-six states and the District of Columbia under that Act. |
| Is it a government agency? | No. California's insurance regulator describes its plan as “a private association whose day-to-day operations are controlled by insurance companies, not taxpayers” — created by the legislature, but not run by the state. |
| Is it taxpayer-funded? | No. It is backed by the private insurers licensed to write in that state. Each shares in the plan's profits, losses and expenses in proportion to its market share — which is how a plan's losses reach ordinary policyholders. |
| Is it insurance of last resort? | That is the usual description, and it is the reason eligibility normally depends on having been turned down in the regular market first. |
| Is it the same in every state? | No, and this is the part that gets copied wrong. What is covered, what it costs, who qualifies and how much you can insure all differ by state. |
Two different counts, and what neither of them tells you
Two figures circulate and are constantly presented as the same figure. One is the twenty-six states and the District of Columbia that implemented a FAIR Plan under the 1968 Act. The other is NAIC's count that, as at October 2024, thirty-three states have some sort of residual market plan.
What we will not do is explain the gap, because NAIC does not, and our first attempt at explaining it was wrong. We said the larger figure swept in beach and windstorm pools and Citizens-style entities as things that are not FAIR Plans. The NAIC page we were citing says the opposite: beach and windstorm plans are “a type of FAIR plan in coastal states”, and Florida's FAIR Plan is the one sold through Citizens. We had built a precision claim on our own inference and got it backwards.
What is safe to say is narrower: the two numbers count different things, they are dated differently, and a page that reports “33 states have FAIR Plans” has quietly converted a residual-market count into a FAIR Plan count.
We are not going to give you a current list, because a list of this kind goes stale quietly and a stale list is worse than none. Your state insurance department is the authority on whether your state has a plan and which kind.
| The figure | What it counts | What it does not tell you |
|---|---|---|
| 26 states and the District of Columbia | Where a FAIR Plan was implemented under the 1968 Act | It is a historical count tied to that Act, not a statement about today |
| 33 states, as at October 2024 | Where there is “some sort of residual markets plan” | NAIC does not explain the gap between the two figures, and neither will we. What NAIC does say is that beach and windstorm plans are “a type of FAIR plan in coastal states”, that Florida's FAIR Plan is sold through Citizens, and that some states additionally run other mechanisms such as assigned risk plans |
Not sure whether a wrap policy is available where you are? A licensed agent can tell you what your options actually are.
Call [PENDING][PENDING]. Calls are answered by [PENDING], a licensed insurance agency (NPN [PENDING]). HomeCoverDesk is not affiliated with any insurer. Calls may be recorded or monitored for quality and training purposes. Our partner does not offer every insurer or every product available in your state.What these policies cover, and the gap nobody warns you about
The single most useful thing to understand is that a FAIR Plan is usually not a homeowners policy. It is closer to a fire policy. The dwelling is the core of it; belongings and other structures are often add-ons; and NAIC's own summary says that, generally, loss of use and personal liability are not offered at all.
Read that last part slowly. Loss of use is what pays for somewhere to live while the house is being rebuilt. Personal liability is what responds when someone is injured on your property. Both are things people assume they have, because both come as standard on the policy they used to hold.
The wrap policy
This gap is well enough known to the industry that a product exists purely to close it. A difference in conditions policy — a DIC, or in California's regulator's words a “wrap-around” policy — sits alongside the plan policy and supplies the perils it leaves out. The department names water damage, theft and liability as examples. Reading its own data, it observes that many FAIR Plan policyholders do not have a DIC policy alongside — which it calls notable, because to cover the same perils a traditional homeowners policy would, a FAIR Plan policy would have to be paired with one. That is an inference the department draws, not a rule it lays down, and we had been presenting it as the latter.
If you are quoted a plan policy and the wrap is not mentioned, that is the question to ask. It is also a fair test of who you are talking to.
| Coverage | On a FAIR Plan? | Notes |
|---|---|---|
| The dwelling itself | Usually yes | This is the core of the policy and, in several states, close to all of it |
| Personal belongings | Often optional | Commonly available as an add-on rather than included by default |
| Other structures | Often optional | Same pattern — detached garage, fence, shed |
| Loss of use / additional living expenses | Generally not offered — but check your state | If the house is uninhabitable, the cost of living elsewhere is generally yours. Texas is an exception: the TFPA's policies pay additional living expenses while repairs are made. An earlier version of this table said these were not offered at all, which is not NAIC's word and not true of every plan |
| Personal liability | Generally not offered — but check your state | Someone injured on your property is generally not covered. Texas again is an exception: the TFPA homeowners, condominium and tenant policies carry personal liability and medical payments |
| Water damage | Generally not | Named by California's regulator as a peril a wrap policy exists to restore |
| Theft | Generally not | Same |
| Flood | No | Flood is not covered by standard home insurance either; it is a separate market |
Why this matters even if you never go near one
Because the plan is funded by its member insurers, a bad year does not stay inside the plan.
California is the worked example, and it is documented because the regulator publishes its orders. On 11 February 2025 the commissioner approved a $1 billion assessment on member insurers, on a finding that the plan faced a substantial threat of insolvency from the January 2025 Southern California wildfires. A year later the department published Order No. 2026-1, dated 27 February 2026, authorizing the plan to arrange a $600 million revolving line of credit maturing a year after that.
What happens next is the part that reaches ordinary households. Under the department's rules, an insurer that pays an assessment may request recoupment of half of it from its own policyholders up to a threshold, and all of anything above that, as a temporary supplemental fee on premium spread over 24 months.
The threshold is two buckets, not one, and we had it as one until 26 August 2026. The rule is published by the California Department of Insurance in its FAQ on recoupment of the FAIR Plan assessment by admitted insurers, published in its rate-filings library and revised 11 September 2025. As published, in one calendar year, assessments up to $1 billion for losses allocated to the plan's dwelling policies, or $1 billion for losses allocated to its commercial policies, or “$2 billion for losses allocated to a combination of such policies”, are recouped at 50%. Above each of those lines it is 100%. So the year in which half-recoupment stops is later, and the sum that can pass through at the softer rate is twice what this page described.
Separately, and this is a distinction we have now got wrong twice: the department's FAQ says that when an assessment is issued “it is allocated between Personal Lines and Commercial Lines based on the losses for each line”, and that the split is approximately 97% to 3%, personal to commercial. That is a split between LINES OF BUSINESS, not among insurers. Each insurer's own share then follows from applying its participation rate — its share of premiums written — to the amount allocated. When this page first published we presented the 97/3 figure as a statement about where the recoupment fee lands on policyholders. Correcting that, we wrote that it was how the assessment was “split among insurers”, which is a second wrong noun in the sentence fixing the first.
So the size of a state's last-resort market is not only a problem for the people in it. Those are California's rules and other states handle assessments differently — but the structure is the same everywhere, because the funding model is the same everywhere.
| Point | What the regulator says |
|---|---|
| What it is | A DIC policy, “often called a ‘wrap-around’ policy”, provides supplementary protection for perils commonly available in an HO-3 or other homeowners policy but not available under the FAIR Plan |
| What it typically restores | The department names water damage, theft and liability coverage as examples |
| Why it matters | The department's own sentence, quoted from its first word: “This suggests that many homeowners with FAIR Plan policies do not have an accompanying DIC policy, which is notable because to cover the same perils that would be covered by a traditional homeowners' policy, each FAIR Plan policy would have to be paired with a DIC policy.” Note what it is: CDI is drawing an inference from its own policy-count data, not stating a rule. Until 26 August 2026 we began the quotation at “to cover”, which turned the inference into a flat rule and dropped the finding that prompted it. A FAIR Plan alone is usually not a whole policy |
| How you find one | California's department publishes a list of insurers that sell them. When we first checked it named 19 insurers across three groups; on re-checking, the page would not load for us, so we cannot confirm that count today — and it carries no revision date in any case. Treat it as a starting point and confirm with the department rather than assuming either the list or our count is current |
| Does every state have this? | No. The DIC market is best established where the FAIR Plan is largest. In other states the question to ask an agent is what fills the same gap |
Limits, and why we will not give you a national figure
Every plan has a maximum it will insure, and above that maximum the shortfall is yours. There is no national number. What we can do is show you one state's, with the order that fixed it, so you can see the shape of the thing and then ask your own state's question.
Note the sunset on the last row, and note that it is not absolute. The Sunset Date is 26 July 2028 — and Order 2026-2 continues: “a High Value Commercial Property Policy issued on or before the Sunset Date may remain in effect for one year after policy inception, even if the policy term expires after the Sunset Date.” Coverage written on the last available day can therefore run into July 2029. We stated the sunset as a hard stop.
Note too what happened to our own source. We first published these limits citing Order 2026-1 of 27 February 2026. That order was discharged by Order 2026-2, which also replaced the sunset's contingent trigger with a date certain. We were citing a dead order as live authority for five months. And our account of the discharge was itself imprecise: Order 2026-2 says “Order 2026-1 is hereby discharged upon the New Plan taking effect” — a condition, not a date. The New Plan took effect on signature, and the signature is dated 27 March 2026, so the condition was satisfied then. But ‘discharged on 27 March 2026’ is our inference from two paragraphs and a signature block, not something the order says, and on a page about citing orders precisely that distinction earns its keep. These are administrative arrangements that change by order at short notice, and any figure on any website — including this one — is only as good as the date beside it and the check behind it.
| Category | Limit | The unit it applies to |
|---|---|---|
| Residential (Division I) | $3 million | At one Location. Not per policyholder — someone insuring two locations is not capped at $3 million in total |
| Commercial (Division I) | $20 million | Per structure, for building, business personal property and associated coverages — with a total aggregate of $100 million per Location, however many structures stand there |
| Businessowners (Division II) | $20 million | A combined limit for building, business personal property and associated coverages at one Location |
| High-value commercial | $20 million per building, up to $100 million per Location | Note that $20 million per Location is the threshold that defines this category — a high-value policy is one exceeding it, not one capped at it. Time-limited: the plan must stop offering these after 26 July 2028 — but not a hard stop for coverage already written. Order 2026-2 provides that a policy issued on or before that date “may remain in effect for one year after policy inception, even if the policy term expires after the Sunset Date”, so coverage can run into July 2029. We stated the sunset absolutely until 26 August 2026 |
What it costs
We are not going to give you a number, and we would be skeptical of any site that does.
Plan pricing is set by state, filed with that state's regulator, and applied to a specific property's hazard exposure and construction. A national average would be an average across states whose plans cover different perils with different limits, which is not an average of anything. The figures that circulate are usually one state's, quoted without saying so.
What is generally true is directional and worth saying plainly: a plan policy usually costs more than the regular-market policy it replaced while covering less, and the wrap policy is an additional premium on top. That combination is the real cost, and it is the comparison worth asking for.
| Step | What happened, or what the rule is |
|---|---|
| The plan runs out of money | On 11 February 2025 California's commissioner approved a $1 billion assessment — “The FAIR Plan's request for an assessment in the amount of $1 billion is APPROVED”. The order's final recital records that “the Commissioner is satisfied that the FAIR Plan has demonstrated that it is in substantial danger of insolvency unless it is authorized to assess its member insurance companies $1 billion to be collected in March 2025” |
| Member insurers pay it | Each insurer licensed in the state contributes in proportion to its market share |
| Insurers may request to recoup part of it from their own policyholders | Under the department's published rules a member insurer may request recoupment of 50% of what it paid, up to a threshold, and 100% above it. The threshold is TWO buckets, not one — we described one until 26 August 2026. In one calendar year: up to $1 billion for losses allocated to the plan's dwelling policies, or $1 billion for its commercial policies, or “$2 billion for losses allocated to a combination of such policies”. Annual and aggregated across assessments within each bucket, not per assessment, and subject to the department's approval |
| It arrives as a fee on ordinary policies | As a temporary supplemental fee calculated as a percentage of each policyholder's premium, collected over 24 months |
| Who ends up paying | Policyholders of the member insurers — not only people on the plan. This is the part almost nobody explains, and it is why the plan's size is a question for homeowners who will never apply to it |
What to establish before you decide
Nothing on this page is advice about your situation, and we have not seen your property or your quote. What we can do is set out the questions the coverage differences above make unavoidable.
| Question | Why it decides something |
|---|---|
| Is liability included, and if not, what will? | A homeowner with no liability coverage is exposed in a way most people do not realize until someone is hurt |
| Is loss of use included? | If a fire makes the house uninhabitable, this is what pays for somewhere to live |
| Is the dwelling limit enough to rebuild? | Plans carry maximums. Above the cap the shortfall is yours |
| Is a wrap policy available here, and from whom? | It is what turns a fire policy back into something like a homeowners policy |
| Will my mortgage servicer accept this policy? | A policy the lender rejects can trigger force-placed coverage, which is worse and more expensive than either |
| What has to be true for me to leave the plan later? | Plans are generally meant to be temporary. Knowing what the regular market wants to see is how you stop the arrangement becoming permanent |
Corrections to this page (10)
We publish these rather than editing quietly. Our corrections policy explains how we handle errors.
- — We described California's 50% recoupment threshold as a single $1 billion figure aggregated across a calendar year. The recoupment FAQ published by the California Department of Insurance gives two separate $1 billion buckets — one for losses allocated to the plan's dwelling policies and one for its commercial policies — “or $2 billion for losses allocated to a combination of such policies”. Twice the sum can pass through at the softer rate than we described.
- — In correcting an earlier error about the 97%/3% figure we introduced a second one, saying that was how the assessment was “split among insurers”. CDI says the assessment “is allocated between Personal Lines and Commercial Lines based on the losses for each line”; each insurer's share then follows from its own participation rate. It is a split between lines of business, not among companies.
- — We labeled our quotation of CDI's DIC sentence “quoted whole”. It was not: it began mid-sentence at “To cover”, with a capital T we had supplied ourselves. The sentence begins “This suggests that many homeowners with FAIR Plan policies do not have an accompanying DIC policy, which is notable because to cover the same perils…”. The text was accurate; the label was a claim we had not checked.
- — We stated the sunset on California's high-value commercial FAIR Plan option as absolute. Order 2026-2 provides that a policy issued on or before the Sunset Date “may remain in effect for one year after policy inception, even if the policy term expires after the Sunset Date” — so coverage can run into July 2029.
- — We recorded that Order 2026-1 was discharged on 27 March 2026. Order 2026-2 says it “is hereby discharged upon the New Plan taking effect” — a condition, not a date. The date is our inference from the order's effective-on-signature paragraph and its signature block. On a page whose own correction record is about citing orders precisely, we were paraphrasing one.
- — We reported that we had printed a sentence inside quotation marks that was not in Order No. 2025-1, attributing to the Commissioner a finding that the FAIR Plan faced a substantial threat of insolvency from the January 2025 wildfires. That retraction was wrong. The sentence is in the order, verbatim, in the paragraph beginning “Based on the foregoing recitals” that carries the Commissioner's own finding — a stronger placement than the recital we replaced it with. We had searched the order loosely, been shown a nearby recital using the words “substantial danger”, and concluded we had invented the rest. The quotation is restored. A retraction is a published claim and needs the same proof as the thing it retracts — this is the second time on this site that rule has had to be applied to our own retraction.
- — We stated California's FAIR Plan limits in the wrong units: $3 million is per Location, not per policyholder, and the commercial limit is $20 million per structure subject to a $100 million per-Location aggregate we had omitted.
- — We cited Stipulation and Order No. 2026-1 as current authority. Order No. 2026-2 discharges it “upon the New Plan taking effect” — a condition, which we infer was satisfied on 27 March 2026, the date on that order's signature block. See the 26 August 2026 notice below on why that distinction matters here of all places.
- — We explained the gap between the 26-state and 33-state counts in a way the NAIC page we cited contradicts — NAIC treats beach and windstorm plans as a type of FAIR plan, and Citizens as the vehicle for Florida's.
- — We gave the Act's name as NAIC gives it. The statute is the Urban Property Protection and Reinsurance Act of 1968, with no “Insurance”.
Methodology and sources
Structure, definitions, the 1968 Act and the coverage pattern come from the National Association of Insurance Commissioners' Fair Access to Insurance Requirements Plans page, last updated 13 December 2024. We deliberately do not repeat the policy-share figure on that page, which is dated March 2022 and predates significant change in the states it describes; a correct source does not make a stale number current.
Every California figure comes from the California Department of Insurance: the limits and the high-value sunset from Stipulation and Order No. 2026-2, executed 27 March 2026, which discharged Order No. 2026-1; the assessment from Order No. 2025-1 of 11 February 2025; the recoupment rules and the 24-month collection period from the department's FAQ on recoupment, revision 11 September 2025; and the wrap-policy description from its Summary on Residential Insurance Policies and the FAIR Plan fact sheet. They are labeled as California's throughout because they are not national rules.
Corrections, 23 August 2026. An adversarial fact-check of this page found five errors, all now fixed and each marked where it occurred. (1) The California limits were stated in the wrong units — $3 million is per Location, not per policyholder, and the commercial limit is $20 million per structure subject to a $100 million per-Location aggregate we had omitted. (2) We cited Order 2026-1, which Order 2026-2 discharged “upon the New Plan taking effect” — a condition we infer was satisfied on 27 March 2026. (3) We explained the 26-versus-33 state gap in a way the NAIC page we cited contradicts. (4) We gave the Act's name as NAIC gives it, which is not its name. (5) We described the 97/3 personal-commercial split as the incidence of the recoupment fee when the source describes it as the allocation of the assessment. We publish these rather than quietly editing them because a page that claims everything is sourced has to show what happened when the source was read wrong.
We have not published a list of which states have plans. Such a list goes out of date without any visible signal that it has, and we would rather send you to your insurance department than maintain a table we cannot guarantee. Where a source we cite carries no revision date — the department's list of insurers selling wrap policies is one — we say so rather than implying it is current.
Nothing here is advice about your own policy. If you find an error, our corrections policy explains how we handle it.
Frequently asked questions
Is a state FAIR Plan a government program?
No — a FAIR Plan is not a government agency and not a government program. The plans were created under state law following the Urban Property Protection and Reinsurance Act of 1968, but they are associations of the private insurers licensed to write in the state, funded by those insurers rather than by taxes. California's insurance department describes its plan as a private association whose day-to-day operations are controlled by insurance companies, not taxpayers. We are not connected to any of these plans and do not process applications to them.
Does a FAIR Plan cover liability?
Generally not. NAIC's summary states that loss of use and personal liability coverages are generally not offered through FAIR Plans. That is the single biggest difference from the homeowners policy most people are replacing, and it is why a separate difference in conditions policy is commonly bought alongside. Because plans differ by state, the plan's own policy documents are what settle it for your state.
What is a difference in conditions or wrap policy?
It is a separate policy bought alongside a FAIR Plan policy to supply the perils the plan does not cover. California's insurance department describes a DIC as a wrap-around policy providing perils commonly available in an HO-3 but not available under the FAIR Plan, naming water damage, theft and liability as examples, and states that covering the same perils as a traditional homeowners policy requires pairing the two. Availability varies by state.
How many states have a FAIR Plan?
Twenty-six states and the District of Columbia implemented one under the 1968 Act. A larger figure you will see quoted — thirty-three states as at October 2024 — is NAIC's count of states with some sort of residual market plan, which is a different and broader measure taken at a different date. NAIC does not explain the gap and we will not guess at it: note only that NAIC treats beach and windstorm plans as a type of FAIR plan, and Florida's FAIR Plan as the one sold through Citizens. Your state insurance department is the authority on which, if either, your state has.
Will a FAIR Plan policy satisfy my mortgage lender?
Often, but not automatically, and it depends on the lender and on what the policy actually covers. It is worth confirming before the old policy lapses, because a lender that considers the coverage insufficient can buy a policy itself and bill you for it. That outcome is more expensive and narrower than either option you were choosing between.
How much does a FAIR Plan cost?
There is no national figure, and a site that gives you one is averaging across state plans that cover different perils with different limits. Plan rates are filed with and approved by each state's regulator and applied to the individual property. What is generally true is that a plan policy costs more than the regular-market policy it replaced while covering less, and that any wrap policy is an additional premium on top of it.
Is being on a FAIR Plan permanent?
It is not intended to be. These are markets of last resort, and the ordinary expectation is that a property returns to the regular market when it can. What that takes depends on why you were declined — roof age, hazard exposure, claims history — and on which insurers are writing in your area at the time. It is worth asking what specifically would have to change.