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FAIR Plan: What You Need To Know

In the insurance industry, there are two types of risks that can be difficult to insure: those businesses or homeowners that are inherently high risk, and those that become hard-to-place over time due to claims or payment issues. At times, businesses with many claims may end up with an insurer of last resort: the California Fair Access to Insurance Requirements (FAIR) Plan. While this plan can be a godsend to some insureds, it is not without its problems. Is the FAIR Plan right for you? What are the risks of being insured under the FAIR Plan? Read on to find out more. It’s A Last Resort The web page for the FAIR Plan makes it very clear that they are an insurer of last resort: What this means is that you can only get a FAIR Plan policy if your insurance broker has exhausted all other options and been declined. This would include insurance companies in both the admitted markets and non admitted markets. If you receive any other quote from an insurance company, even if it is higher in premium than the FAIR Plan, you must accept the higher quote.   How Did You End Up in the FAIR Plan? There are a few ways your home or business may have ended up in the FAIR Plan: The homeowner had too many claims. If there were multiple break-ins or fires, the open market may have been uninterested in insuring the home, so it was moved to the FAIR Plan. If you have been in the Plan for several years with no claims, you may be eligible once again...