Who pays for FAIR Plans?
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Most FAIR Plans are not funded by general tax dollars. They are typically set up under state law as associations of the private insurance companies licensed to sell property insurance in the state. Day-to-day operations and claims are paid primarily from the premiums FAIR Plan policyholders pay, along with reinsurance. When claims exceed what the plan can cover, the shortfall is usually shared by member insurers through assessments based on their share of the state's property insurance market — and some states allow insurers to recoup part of that cost from their own policyholders. A few programs work differently: Florida's and Louisiana's Citizens Property Insurance Corporations are state-created entities that can levy surcharges and emergency assessments on policyholders statewide, and coastal wind pools may also rely on bonds. Rules vary by state, so learn what a FAIR Plan is and compare options with a licensed insurance agent.