Texas FAIR Plan Insurance: Eligibility, Policies, and Claims

Texas FAIR Plan insurance is a state-authorized, last-resort property insurance program for Texas homeowners, condo owners, and renters who have been turned down by at least two licensed private insurers. It is run by the Texas FAIR Plan Association (TFPA) under Texas Insurance Code Chapter 2211 and regulated by the Texas Department of Insurance (TDI). Premiums generally run higher than standard market rates, and coverage is narrower than what most private policies offer.1Texas Department of Insurance. Texas FAIR Plan Association Overview

Who Qualifies

You must have been turned down by at least two insurance companies that are licensed and actively writing property insurance in Texas.2Texas FAIR Plan Association. Coverage and Eligibility If any private carrier has offered you a policy or a renewal, you don’t qualify.3Texas Department of Insurance. Other Ways to Get Auto, Home, and Wind Insurance in Texas The program exists for people who genuinely can’t find coverage, not those looking for a cheaper premium.

Even with two declinations, the property itself has to be insurable. TFPA will deny coverage for:2Texas FAIR Plan Association. Coverage and Eligibility

  • Condemned homes or homes with unrepaired damage.
  • Vacant properties.
  • Residential dwellings used for business, and farms or ranches used commercially.
  • Properties with dangerous animals, unfenced pools, or unfenced trampolines.
  • Applicants convicted of arson, fraud, or other insurance-related offenses.
  • Applicants with more than eight paid claims (excluding glass) in the past three years.
  • Mobile homes, unless the wheels have been removed and the home is tied down.

An inspection may be required. If it turns up structural or safety deficiencies, you’ll need to make repairs before a policy is issued.

The Four Policy Types

TFPA offers four policies, each built for a different living situation:4Texas FAIR Plan Association. Summary Description of TFPA Coverages

  • Homeowners Policy (HO-A). The broadest option, for owner-occupied homes. Covers the dwelling, personal property, loss of use, personal liability, and medical payments.
  • Dwelling Policy (TDP-1). A stripped-down policy covering fire and lightning only as standard perils. Windstorm, hail, vandalism, and similar perils are optional add-ons. No liability protection. Commonly used for rental properties or homes that don’t qualify for the HO-A.
  • Condominium Policy (HO-CONB). Covers the interior of a condo unit, personal property, liability, and medical payments.
  • Tenant Policy (HO-BT). Covers a renter’s personal belongings, liability, and medical payments. The building itself isn’t covered.

The HO-A, HO-CONB, and HO-BT all include personal liability and medical payments as standard, with liability limits of $100,000 or $300,000. The Dwelling Policy does not.4Texas FAIR Plan Association. Summary Description of TFPA Coverages

What’s Covered and What Isn’t

Every TFPA policy covers fire and lightning. The Homeowners, Condominium, and Tenant policies also cover windstorm, hail, explosion, smoke, vandalism, and damage from aircraft or vehicles as standard perils. On the Dwelling Policy, those perils cost extra.4Texas FAIR Plan Association. Summary Description of TFPA Coverages

Flood damage is not covered by any TFPA policy. If your home sits in a flood-prone area, you’ll need a separate flood policy, typically through the National Flood Insurance Program.

Loss-of-use coverage, which pays additional living expenses while your home is being repaired after a covered loss, is included on the Homeowners, Condominium, and Tenant policies. It is not included on the Dwelling Policy.

One boundary worth knowing if you live on the coast: the FAIR Plan is not the same as the Texas Windstorm Insurance Association (TWIA). TWIA sells wind and hail coverage for coastal residents who’ve been turned down by a private insurer. The FAIR Plan covers a broader range of perils statewide.3Texas Department of Insurance. Other Ways to Get Auto, Home, and Wind Insurance in Texas In designated coastal counties, you may need TWIA for wind and hail and a separate TFPA policy for everything else.

Coverage Limits and How Losses Are Valued

TFPA policies default to actual cash value (ACV) for the dwelling and personal property. Actual cash value is replacement cost minus depreciation. A 15-year-old roof destroyed by fire is valued at what a 15-year-old roof is worth, not what a new roof costs. That gap can leave you paying thousands out of pocket.4Texas FAIR Plan Association. Summary Description of TFPA Coverages

Replacement cost coverage is available as an endorsement on the Homeowners Policy but not on the Dwelling Policy. To qualify for the endorsement, you must insure the dwelling for 100 percent of its replacement cost value.4Texas FAIR Plan Association. Summary Description of TFPA Coverages

The 80 Percent Coinsurance Rule

Even without the replacement cost endorsement, TFPA applies an 80 percent coinsurance rule. If your home is insured for less than 80 percent of its full replacement cost at the time of a loss, TFPA may pay only a portion of the claim. If your home would cost $300,000 to rebuild but you carry $200,000 in coverage, you’re below the threshold, and your payout can be reduced proportionally even for a loss well within the coverage limit.4Texas FAIR Plan Association. Summary Description of TFPA Coverages

Personal Property Limits

Under the Homeowners Policy, personal property coverage is automatically set at 50 percent of the dwelling coverage amount. A $200,000 dwelling policy comes with $100,000 in contents coverage. You can raise that to 60 or 70 percent for an additional premium. The Condominium and Tenant policies allow personal property limits up to $500,000. Replacement cost coverage for personal property can be added to the HO-A, HO-CONB, and HO-BT for an extra premium.4Texas FAIR Plan Association. Summary Description of TFPA Coverages

How to Apply

TFPA does not sell policies directly. You must work with a licensed insurance agent to apply, and the TFPA website has an agent search tool.2Texas FAIR Plan Association. Coverage and Eligibility5Texas FAIR Plan Association. About the Texas FAIR Plan Association

Your agent will collect the documentation TFPA needs: proof of two declinations from private insurers, property details, ownership verification, and photographs of the home. TFPA uses that information to set your coverage level and premium based on location, construction type, and risk profile. If an inspection is required, you’ll need to address any deficiencies before the policy is issued.

Renewing: The Two-Year Declination Rule

Eligibility isn’t permanent. To keep your policy, you must obtain two fresh declinations from private insurers every two calendar years.6Texas FAIR Plan Association. TFPA Proof of Declination Requirements If private carriers are willing to insure your home again, TFPA wants you back in the standard market.

Don’t wait until the renewal date. Getting declination letters takes time, and a lapse in coverage creates its own problems. Ask your agent to start collecting declinations well ahead of your renewal.

Filing a Claim

Report damage to TFPA as soon as possible, online, by phone, or through your agent. Have your policy number, the date of the damage, and a description of what happened ready. Delays can complicate the claim, especially if TFPA questions whether additional damage came from a failure to protect the property after the initial loss.

TFPA assigns an adjuster to inspect the damage, review repair estimates, and determine the payout under your policy terms. Because most TFPA policies default to actual cash value, the payout reflects depreciation. A 10-year-old appliance destroyed in a fire won’t be reimbursed at new-appliance prices unless you carry a replacement cost endorsement.

Get your own repair estimates from licensed contractors. Independent numbers give you leverage if they don’t line up with the adjuster’s assessment. Under Texas law, insurers must pay covered claims within 60 days of receiving all necessary documentation. If TFPA misses that deadline, you may be entitled to penalties and interest.

If a Claim Is Denied or Underpaid

Request a written explanation of the denial and compare the stated reasons against your actual policy language. Denials often hinge on exclusions the homeowner wasn’t aware of, missed reporting deadlines, or insufficient documentation. If paperwork is the issue, submitting contractor estimates, photographs, or repair invoices may prompt a reconsideration.

When direct negotiation stalls, you can file a complaint with the Texas Department of Insurance through its Consumer Complaint Portal or by phone at 800-252-3439.7Texas Department of Insurance. Get Help with an Insurance Complaint TDI will review whether TFPA handled the claim in accordance with state guidelines.

You can also hire a public adjuster to negotiate on your behalf. Public adjusters in Texas are licensed professionals who assess your damage, prepare their own estimate, and negotiate with the insurer. Their fees are capped at 10 percent of the claim settlement amount.8Texas Department of Insurance. Public Adjusters: What to Know Before You Hire One On a large or complex claim, that 10 percent can pay for itself if the adjuster recovers significantly more than TFPA’s initial offer. On a smaller claim, the math may not work. Keep thorough records of all communications, photographs, receipts, and claim expenses throughout the process.