The FAIR Plan is one of the most misunderstood kinds of property insurance. Here are the most common myths we hear, and the facts behind them.
Myth: “The FAIR Plan is a taxpayer-funded government program.”
Fact: FAIR Plans are usually run as associations of the insurance companies licensed in the state, which share the costs. The Washington FAIR Plan, for example, receives no taxpayer funding. The Ohio FAIR Plan is supported by every insurer licensed to write fire insurance in Ohio.
Myth: “It covers the same things as a regular homeowners policy.”
Fact: FAIR Plan coverage is basic. It typically covers fire, vandalism and certain named disasters. Theft, liability and water damage are often limited or not included. Read more: FAIR Plan vs. a standard homeowners policy.
Myth: “FAIR Plans cover flood.”
Fact: They don't. Flood coverage is a separate policy, usually through the National Flood Insurance Program.
Have a question about the FAIR Plan that isn't answered here? Ask a licensed Insurance Agent.
Call (888) 928-9324Myth: “I can just call the FAIR Plan and sign up myself.”
Fact: In most states, you apply through a licensed insurance agent. In Iowa, only a licensed agent can submit an application. In Texas, you need an agent to apply.
Myth: “Once I'm on the FAIR Plan, I'm stuck there.”
Fact: Many people move back to a standard policy after fixing the issues that led to a denial. Read more: How long can you stay on a FAIR Plan?
Myth: “The FAIR Plan is only for certain neighborhoods.”
Fact: FAIR Plans in our states are generally available statewide for eligible property. Since 1977, for example, the entire state of Ohio has been eligible.