Summary: Fair Access to Insurance Requirements (FAIR) plans are a market of last resort that may provide insurance to those who cannot obtain coverage in the voluntary market. They are state-run and provide insurance to high-risk properties. Eligibility varies by state, but it is typically required for the property to be rejected by two or three insurers in the voluntary market to be eligible.
Not all states have a FAIR plan, but a majority do. Colorado is the most recent state to establish a FAIR plan, with the signing of HB23-1288 on May 12, 2023. A plan of operation was submitted to the Colorado Division of Insurance and approved on July 26, 2024. They began accepting residential property applications on April 10, 2025.
To be eligible for the Colorado FAIR plan, a property must have been denied coverage by at least three standard insurers in the state. Since these properties are high-risk, FAIR plan premiums are typically much higher than those found in the voluntary market, and the scope of coverage is limited.
The Colorado FAIR plan offers coverage for losses arising from fire or lightning for residential properties on an actual cash value basis. Homeowners can opt for additional coverage for personal property/contents coverage. They can also opt for additional causes of loss for losses arising from the perils of windstorms or hail, explosions, riot or civil commotion, vehicles, smoke, volcanic eruption, vandalism, and malicious mischief. The maximum combined limit for property and contents is $750,000.
There is no replacement cost option; coverage is limited to actual cash value. Contrary to a standard homeowners policy, there is also no liability coverage and no additional living expenses coverage. Commercial property coverage is also available with a maximum limit of $5 million.
This discussion is an analysis of the form used by the FAIR plan to write residential property coverage. Coverage is written on a modified ISO Dwelling Property Basic Form: CFP DP 00 01 01 25. This discussion is split into several sections. The sections are as follows:
Part 4 - Conditions
Insuring Agreement & Definitions
AGREEMENT
We will provide the insurance described in this Policy in return for the premium and compliance with all applicable provisions of this Policy
DEFINITIONS
In this Policy, "you" and "your" refer to the "named insured" shown in the Declarations and:
1. The spouse; or
2. A party who, with the "named insured", has entered into a civil union recognized under Colorado law;
if a resident of the same household.
"We", "us" and "our" refer to the company providing this insurance.
Analysis
The form begins with a standard insuring agreement. The insurer agrees to provide coverage in return for the premium paid by the insured and compliance with all applicable provisions of the policy. The provisions are important because if the insured does not comply with all the policy provisions or conditions, coverage may be denied.
The definitions show that anytime the policy refers to “you” or “your”, they are referring to the named insured shown in the Declarations and their spouse if they are a resident of the same household. Since this is a Colorado-specific contract, also included as an insured is a party who has entered into a civil union recognized by Colorado law with the named insured.
Anytime the policy uses “we”, “us”, and “our,” it is referring to the insurance company providing the policy.
Coverages
COVERAGESThis insurance applies to the Described Location, Coverages for which a limit of liability is shown and Perils Insured Against for which a premium is stated.
A. Coverage A – Dwelling
1. We cover:
a. The dwelling on the Described Location shown in the Declarations, used principally for dwelling purposes, including structures attached to the dwelling;
b. Materials and supplies located on or next to the Described Location used to construct, alter or repair the dwelling or other structures on the Described Location; and
c. If not otherwise covered in this Policy, building equipment and outdoor equipment used for the service of and located on the Described Location.
2. We do not cover land, including land on which the dwelling is located.
Analysis
Coverages apply to the described location in the declarations, for which a limit is shown, and for the perils shown. Coverage is on a named-perils basis, so there is only coverage for the perils chosen, which will be discussed later.
The first coverage provided is Coverage A–Dwelling, which insures the residential dwelling shown in the declarations, any structures attached to it, and materials and supplies on or adjacent to the location that are used for construction, alteration, or repair of the dwelling or other structures at the described location. Included within the Coverage A limit are building equipment and outdoor equipment used to service the residence and located on the residence.
Similar to what is found on a typical homeowners or dwelling policy, there is an exclusion for land, including land on which the dwelling is located.
B. Coverage B – Other Structures
1. We cover other structures on the Described Location, set apart from the dwelling by clear space. This includes structures connected to the dwelling by only a fence, utility line or
similar connection.
2. We do not cover:
a. Land, including land on which the other structures are located;
b. Other structures rented or held for rental to any person not a tenant of the dwelling, unless used solely as a private garage;
c. Other structures used in whole or in part for commercial, manufacturing or farming purposes. However, we do cover a structure that contains commercial, manufacturing or farming property solely owned by you or a tenant of the dwelling, provided that such property does not include gaseous or liquid fuel, other than fuel in a permanently installed fuel tank of a vehicle or craft parked or stored in the structure; or
d. Gravemarkers, including mausoleums.
Analysis
The next coverage provided is Coverage B–Other Structures, which covers structures not attached to the dwelling and apart from the dwelling (but still on the described location). Other structures may be connected to the dwelling by a fence, utility line, or a similar connection. These can include things like a garage, shed, guesthouse, etc. Structures attached to the dwelling are covered under Coverage A.
Excluded from Coverage B are land and structures rented or held for rental to a person that is not a tenant of the dwelling, unless that structure is rented only as a private garage. An insured could rent out a garage for a friend to store an old sports car that is being restored, for example. Also excluded are structures used for commercial, manufacturing, or farming purposes, but there is an exception for structures that contain commercial, manufacturing, or farming property that is owned by the named insured or a tenant, so long as such property is not gaseous or liquid fuel, other than that found in a vehicle parked or stored in the structure. If a tenant stores farm equipment, or equipment for his printing business, that would be covered. Finally, gravemarkers and mausoleums are excluded.
C. Coverage C – Personal Property
1. Covered Property
We cover personal property, usual to the occupancy as a dwelling and owned or used by you or members of your family residing with you while it is on the Described Location. After a loss and at your request, we will cover personal property owned by a guest or servant while the property is on the Described Location.
In no event will we pay more than $5,000 for a loss of any one item covered under Coverage C in any one occurrence. This coverage does not increase the limit of liability for Coverage C.
Analysis
The FAIR Plan provides Coverage C–Personal Property coverage, though with some limitations compared to a typical homeowners form. There is coverage for personal property while on the described location, in contrast to some homeowners policies, which provide worldwide coverage for personal items. This aligns with the standard dwelling fire form. As the FAIR plan is the provider of last resort, it is structured around the dwellling fire form, and is therefore more restrictive. However, the CFP does provide some worldwide coverage as an “Other Coverage”, discussed later.
Coverage in the FAIR Plan is for personal property “usual to the occupancy,” as opposed to personal property “owned or used by an insured,” found in the ISO HO 00 03 policy. The FAIR Plan policy may exclude items if they are found not usual to the occupancy, while the HO 00 03 policy can include items not owned by an insured, such as borrowed or leased items.
The HO 00 03 form includes limited coverage for property at other locations, including other residences owned by an insured and in a self-storage facility, subject to 10% of the Coverage C limit, or $1,500, whichever is greater. There is no such coverage in the FAIR plan, which only includes coverage for property on the described location.
The FAIR Plan policy will not pay greater than $5,000 for loss to any one item covered under Coverage C. While the HO 00 03 does place special limits on certain personal property, such as $300 on money, $2,000 on watercrafts, $2,000 on model or hobby aircraft, etc, there is no overarching sublimit for all personal items. The $5,000 limit is the maximum for any one item, and is not the total limit of coverage for personal property. And insured could have a dining room table valued at $12,000; if the property is damaged the insured will only get $5,000 for that table.
2. Property Not Covered
We do not cover:
a. Accounts, bank notes, bills, bullion, coins, currency, deeds, evidences of debt, gold other than goldware, letters of credit, manuscripts, medals, money, notes other than bank notes, passports, personal records, platinum other than platinumware, securities, silver other than silverware, tickets, stamps, scrip,stored value cards and smart cards;
b. Collectors’ items, meaning items whose age, history, or rarity contribute to this value.
c. Animals, birds or fish;
d. Aircraft, meaning any contrivance used or designed for flight, including any parts whether or not attached to the aircraft.
We do cover model or hobby aircraft not used or designed to carry people or cargo;
e. Hovercraft and parts. Hovercraft means a self-propelled motorized ground effect vehicle and includes, but is not limited to, flarecraft and air cushion vehicles;
f. Motor vehicles or all other motorized land conveyances.
This includes their equipment and parts while such property is in or upon the vehicle or conveyance.
However, this Paragraph 2.e. does not apply to:
(1) Portable electronic equipment that:
(a) Reproduces, receives or transmits audio, visual or data signals; and
(b) Is designed so that it may be operated from a power source other than the electrical system of motor vehicles and all other motorized land conveyances.
(2) Motor vehicles or other motorized land conveyances not required to be registered for use on public roads or property which are:
(a) Used solely to service a residence; or
(b) Designed to assist the handicapped;
g. Watercraft of all types, other than rowboats and canoes;
h. Data, including data stored in:
(1) Books of account, drawings or other paper records; or
(2) Computers and related equipment.
We do cover the cost of blank recording or storage media and of prerecorded computer programs available on the retail market;
i. Credit cards, electronic fund transfer cards or access devices used solely for deposit, withdrawal or transfer of funds; or
j. Water or steam; or
k. Gravemarkers, including mausoleums.
Analysis
Next, we find the property not covered under Coverage C–Personal Property. Many personal items that are given limited coverage with special limits in the homeowners forms are excluded in this policy. This includes bank notes, bills, currency, manuscripts, gold other than goldware, platinum other than platinumware, stamps, etc. Also excluded are collectors’ items — items whose age, history, or rarity contribute to their value. This exclusion is not specifically named in the homeowners forms, but a special limit may apply based on what the item is. Collectors items are generally better covered by a schedule or inland marine policy, depending on the nature of the item.
Common exclusions for personal property found on the CFP policy and the ISO HO 00 03 include animals, birds, fish, aircraft, hovercraft, motor vehicles, credit cards, and water or steam. Motor vehicles or other land conveyances not required to be registered for use on public roads or which are used solely to service a residence or designed to assist the handicapped are excepted. Also excepted are portable electronic equipment that reproduces, receives, or transmits audio, visual, or data signals and are designed to be able to be used from a power source other than a vehicle’s electrical system.
The CFP policy excludes watercraft other than rowboats and canoes, while the HO 00 03 policy provides a sublimit up to $2,000. While both policies exclude data, including data stored in books of account, drawings or other paper records, or computers and related equipment, the HO 03 specifies that only business data is excluded, while the CFP policy excludes all data.
Finally, the CFP policy excludes gravemarkers, including mausoleums, while the HO 00 03 provides up to $5,000 for that property.
3. Property Removed To A Newly Acquired Principal Residence
If you remove personal property from the Described Location to a newly acquired principal residence, the Coverage C limit of liability will apply at each residence for the 30 days immediately after you begin to move the property there. This time period will not extend beyond the termination of this Policy. Our liability is limited to the proportion of the limit of liability that the value at each residence bears to the total value of all personal property covered by this Policy.
Analysis
The final coverage provided under Coverage C is for personal property moved from the described premises to a newly acquired principal residence. Once moving begins, the Coverage C limit will apply for 30 days at each residence. This does not mean the limit may be doubled; there is still just one limit that applies to both residences.
D. Coverage D – Fair Rental Value
1. If a loss to property described in Coverage A, B or C by a Peril Insured Against under this Policy makes that part of the Described Location rented to others or held for rental by you unfit for its normal use, we cover the fair rental value of that part of the Described Location rented to others or held for rental by you less any expenses that do not continue while that part of the Described Location rented or held for rental is not fit to live in.
Payment will be for the shortest time required to repair or replace that part of the Described Location rented or held for rental. We will pay only the proportionate share of the total value of the rental amount for each month the rented part of the Described Location is unfit for its normal use. The proportionate share corresponds to the number of months the Described Location is rented or held for rental.
2. If a civil authority prohibits you from use of the Described Location as a result of direct damage to a neighboring location by a Peril Insured Against in this Policy, we cover the Fair Rental Value loss for no more than two weeks.
3. The periods of time referenced above are not limited by the expiration of this Policy.
4. We do not cover loss or expense due to cancellation of a lease or agreement.
Analysis
The CFP policy provides coverage for fair rental value. This means that if there is a loss to property by a peril covered by the policy under Coverage A, B, or C, which makes a part of the residence that is rented to others or held for rental unfit for occupancy, the policy will provide coverage. The policy will pay the fair rental value of the part of the residence rented to others or held for rental, minus any expenses that do not continue while the area is unfit to live in.
The insurer will provide this payment for the shortest time necessary to repair or replace the damaged part of the premises rented to others. The insurer will pay the proportionate share of the total value of the rental amount of the unit premises, depending on the number of months the area is rented or held for rental. If a rented part of the premises is only rented to others or held for rental for 6 months of the year, then the policy would only pay if the area is unfit to live in when the room would typically be rented.
If damage to a neighboring location caused by an insured peril forces a civil authority to prevent you from using the insured premises, the policy provides fair rental value for up to two weeks. Finally, Coverage D does not provide for loss or expense due to the cancellation of a lease or agreement.
Not included in Coverage D of the CFP policy is additional living expense, which can be found in the ISO homeowners forms. ALE provides the necessary increase in living expenses incurred by the insured and residents of the household if the residence is unfit to live in. The homeowners forms provide fair rental value and ALE coverage, while the CFP is limited to fair rental value.