The Texas FAIR Plan

The Insurer of Last Resort

The Texas FAIR Plan Association (TFPA) was established by state legislation in 1995 and became operational in 2002 to offer residential property insurance to those who are unable to get coverage via the traditional private insurance market. TFPA was created by the Texas Legislature to offer critical property insurance to qualified Texas property owners when no one else would, and it does not compete with the private market.

Qualification Requirements

You must have been denied coverage by at least two insurance companies that are actively writing residential property insurance policies in Texas to demonstrate your inability to secure coverage in the voluntary market. You cannot have a current homeowners policy, a renewal offer, or a valid offer of comparable residential property insurance from another licensed Texas insurer. You must provide proof of declinations and work through a licensed Texas agent authorized to submit FAIR Plan applications.

Available Coverage Types

The Texas FAIR Plan provides homeowners, dwelling, condo, and tenant (renters) insurance, with the average annual cost for a homeowners policy around $1,440. Plans cover perils including fire, windstorms, hail, lightning, explosions, smoke, vandalism, sprinkler leakage, aircraft and vehicle collisions, riots and civil commotion, sinkholes, and volcanoes.

Significant Limitations

TFPA does not insure commercial properties, and the coverage provided by its policies is significantly reduced in comparison to that of standard open market insurance policies. Texas's 14 littoral municipalities and the portion of Harris County east of State Highway 146 on Galveston Bay are not covered by the Texas FAIR Plan for windstorm, hail, and hurricane damage. The total insurable value maxes out at 50% of the total value of the house for homeowners and dwelling policies.

Growing Demand

Between 2020 and 2022, TFPA saw fewer people applying for the policy, but by 2023, the number started climbing, with 11,174 policies written. Then, in 2024, the highest increase occurred, with 41,234 policies. Texas Department of Insurance records show that more than 58% of TFPA policies are for properties in Harris County.

Important Considerations

The Texas FAIR Plan should be considered temporary coverage until you are able to reintegrate into the private market. In comparison to standard policies, it offers lower limits on personal property, excludes many common risks, and is restricted to specified perils, despite providing essential protection. For coastal properties requiring wind and hail coverage, you'll need a separate policy from the Texas Windstorm Insurance Association.