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Often referred to as state-run insurers of last resort, Fair Access to Insurance Requirements (FAIR) plans are state-managed property insurance plans that provide coverage for property owners who can't obtain a policy from private insurance companies due to high-risk factors. The application process can vary by state, but usually, the minimum requirement for homeowners is proof of coverage denial from at least two private insurers.

Initially, the passage of the Urban Property Insurance Protection and Reinsurance Act of 1968 ushered in FAIR Plans as a solution " in 26 states and Washington, D.C. While FAIR Plan access is currently available in nearly three dozen states and D.C., these programs are no longer focused solely on urban areas and are particularly essential in states such as California and Florida, where natural disasters and high claims are more frequent. Some state FAIR Plans may offer only limited coverage, and in these situations, homeowners may be encouraged to consider supplemental policies to fortify their asset protection.

10 key facts property owners should know about Fair Plans.

1. Usually, to qualify for coverage, the property to be insured must be:

• free of any penalties, liens, or assessments
• current on all local building, housing, sanitation, or environmental laws

2. Some states also require applicants to periodically re-attempt to obtain private insurance.

3. Fair Plan policies can be more expensive than standard private insurance to counterbalance increased risk for factors:

• frequent severe weather (e.g., hurricanes, tornadoes)
• older property with outdated infrastructure
• location in a neighborhood with a high crime rate, vandalism, or theft
• property owner's history of multiple insurance claims

4. The standard FAIR Plan policy for residential property usually includes only dwelling coverage. This coverage is similar to the part of a private insurance policy that covers risks to the property's physical structure and permanent fixtures attached (e.g., a garage). Coverage for personal belongings and additional structures on the property, if offered, is usually available via optional policy add-ons.

5. There are some coverage options that aren’t typically offered in Fair plans:

• loss of use and personal liability coverages
• theft, flood, earthquake, or hail
• vandalism or personal liability

6. Fair Plans policies typically don't offer discounts commonly associated with standard insurance products. However, in some states, addressing risk concerns via home updates or improving credit scores can make policyholders eligible for a premium reduction.

7. If a state offers FAIR Plan insurance, the plans are typically available statewide and may be designed to reflect the common perils affecting most property owners in that state. The California FAIR Plan deals with coverage for brush fires. In New York and Georgia, these plans offer wind and hail coverage for some of the highest-risk coastal communities. However, many Fair Plans do not offer beach, wind, and similar storm coverage for certain areas of their respective state.

8. Besides FAIR Plans, there are other kinds of state-run insurers of last resort. These plans usually address geography—driven risks and carry names that include words such as Beach, Wind, or Citizens. However, the availability of plans for these specific risks is usually limited to a handful of ZIP codes—except for in Florida and Louisiana, where these plans are available statewide.

For example, Florida’s Citizens Property Insurance Corporation (CPIC) will insure new homeowners in high-risk areas and others statewide who cannot find coverage in the open private market. Additionally, CPIC oversees a free service, the Florida Market Assistance Plan (FMAP), that connects property owners looking for insurance coverage in the private market to licensed agents offering plans.

9. In some states – and under certain circumstances – a property owner may be eligible to purchase coverage from an Excess and Surplus (E&S) insurer through a broker specifically licensed for this purpose in their state. These are insurers that take on high or special risks that other insurers decline. However, property owners should understand that E&S premiums can be significantly higher than standard or fair plan coverage.  Also, E&S policies aren't supported by state guaranty funds that help pay claims if an admitted (i.e., standard) insurer becomes insolvent.

10. When a property owner is unable to obtain insurance in the private market, and their state doesn't offer a FAIR plan, there may still be other avenues to explore:

• Speak to ÌìÃÀ´«Ã½ agent if a prior policy was canceled to determine whether addressing any risk concerns will re-enable access to standard coverage.
• Reach out to that state's insurance department to see if there is any further guidance.

Nearly half of the participants in a reported damage to their homes after a severe weather event. Many mortgage lenders require the borrower to carry insurance. Homeowners should know that even if they don't have a mortgage, insurance can provide a financial safety net against unexpected damage. The Insurance Information Institute (Triple-I) offers a guide to help prospective and current homeowners understand their coverage needs and protect their investment while managing insurance costs.