Why are FAIR Plans growing so fast across the U.S.?
PUBLISHED · LAST UPDATED · RESEARCHED AND COMPILED BY EMIO Staff · INDEPENDENTLY REVIEWED BY Brian Joyner, A LICENSED P&C BROKER, PER OUR EDITORIAL STANDARDS · INFORMATION IS FOR EDUCATIONAL USE ONLY AND DOES NOT CONSTITUTE PROFESSIONAL ADVICE · REPORT AN ERROR
FAIR Plan and other residual-market policies have grown fast nationwide — reaching an estimated 2.7 million policies by 2024, covering roughly $1.1 trillion in exposure, after nearly doubling between 2018 and 2023. Rising weather-related losses, higher reinsurance costs, and insurers reducing their appetite for property risk have pushed more homeowners into their state's plan of last resort.
What's driving the growth?
- Increasing frequency and severity of weather-related catastrophes.
- Rising reinsurance and claims costs prompting admitted insurers to reduce property risk appetite.
- Policy nonrenewals pushing more homeowners toward residual markets.
- Underwriting losses inside FAIR Plans themselves — the national combined ratio for FAIR Plan business reached 110.9 in 2023, up from 104.5 in 2022.
If you're on a FAIR Plan, it's worth periodically checking whether standard-market or specialty coverage has become available for your property — an independent agent can run that comparison for you.