The Texas Insurance Code requires the FAIR plan to file proposed rate changes with the commissioner; the commissioner then has 60 days to approve or disapprove the rates in whole or in part. Proposed rate changes were filed with the commissioner in December 2022. The deadline was extended to March 22, 2023 and rates have been approved to take effect August 1, 2023.
FAIR stands for Fair Access to Insurance Requirements, and plans began in the 1960s as a way to enable residents and businesses to obtain fire insurance that wasn't available through the standard market. Many states have FAIR plans, and coverage is provided which allows insureds in certain areas with limited insurance options to obtain property insurance.
Rate changes were filed for Texas homeowners, dwelling, condominium and tenants policies. Premium and loss data for five years from 2017 to 2021 were used in developing the rates by zone. Allowable rate changes are capped at 10% on both increases and decreases. Rates are capped to promote rate stability.
The indicated and proposed changes by line of business and zone are as follows:
| HOMEOWNERS | ||
| Zone | Indicated Change | Proposed Change |
| Central North-Greater Dallas/Ft. Worth | 38.3% | 10% |
| Central North – Remainder | 19.4% | 10% |
| Central South | 24.5% | 10% |
| North/Northwest | 27.8% | 10% |
| Seacoast Tier 1 | 13.8% | 10% |
| Seacoast Tier 2 | 15.9% | 10% |
| Overall Statewide Average | 18.2% | 10% |
| DWELLING | ||
| Zone | Indicated Change | Proposed Change |
| Overall Statewide Average Fire coverage | 15% | 10% |
| Central North-Greater Dallas/Ft. Worth – Extended coverage | 60.2% | 10% |
| Central North – Remainder- Extended coverage | 45.2% | 10% |
| Central South -Extended coverage | 40% | 10% |
| North/Northwest -Extended coverage | 29.5% | 10% |
| Seacoast Tier 1- Extended coverage | -34.3% | -10% |
| Seacoast Tier 2- Extended coverage | 20.7% | 10% |
| Overall Statewide Average | 21.9% | 9.5% |
| CONDOMINIUM | ||
| Zone | Indicated Change | Proposed Change |
| Central North-Greater Dallas/Ft. Worth | 36.5% | 10% |
| Central North – Remainder | 172.6% | 10% |
| Central South | 40% | 10% |
| North/Northwest | 27.2% | 10% |
| Seacoast Tier 1 | 20% | 10% |
| Seacoast Tier 2 | 30.6% | 10% |
| Overall Statewide Average | 29.9% | 10% |
| TENANT | ||
| Zone | Indicated Change | Proposed Change |
| Central North-Greater Dallas/Ft. Worth | 27.1% | 10% |
| Central North – Remainder | 5.8% | 5.8% |
| Central South | 8% | 8% |
| North/Northwest | 6.6% | 6.6% |
| Seacoast Tier 1 | 40.1% | 10% |
| Seacoast Tier 2 | 26.5% | 10% |
| Overall Statewide Average | 28% | 9.8% |
The insurance code requires the FAIR plan to set rates sufficient to carry all claims to maturity and to meet the expenses incurred in writing and servicing the business. These rates have been approved and are effective for new and renewal business August 1, 2023. A copy of the notice may be found here.
Christine G. Barlow, CPCU
Christine G. Barlow, CPCU, is Executive Editor of FC&S Expert Coverage Interpretation, a division of National Underwriter Company and ALM. Christine has over thirty years’ experience in the insurance industry, beginning as a claims adjuster then working as an underwriter and underwriting supervisor handling personal lines. Christine regularly presents and moderates webinars on a variety of topics and is an experienced presenter.