What to do before signing up for the FAIR plan?

Right plan for home insurance

If your home is in the tornado alley, an earthquake-prone area or a locality with a high rate of crime, you might find it excruciatingly painful to secure home insurance. High incidences of windstorms and hurricanes make it almost impossible for property owners in these areas to get insurance coverage on their houses. Sometimes, old homes that might have been in need of repair for quite a few years, also do not qualify for the regular home insurance policies.

What do owners of similar properties do? Sustaining in the US without home insurance is impossible. New house-owners might find it a little easier than the older ones since they can ask their realtor for references of insurance companies that write checks for similar properties. The owners of old properties don’t have it that easy. The depreciating real estate value of their property in combination with the high threat only makes their task of finding an insurance provider harder than ever.

Is FAIR plan your only option?

During such trying times, you might want to believe that the FAIR plan is your only option. The FAIR plan or the Fair Access to Insurance Requirements is a program that helps the owners of high-risk properties find insurance coverage. However, just like any other insurance plans, FAIR has several qualifying requirements. The homeowners might have to mitigate the risk of fire, eliminate water damage, install surveillance cameras and set up burglar alarms depending on the most prevalent threat in their neighborhood.

How to find insurance for high-risk homes?

The FIAR plans are different in each state, although their primary aim is the same. The FAIR plan helps homeowners in high-risk areas find insurance, only after the owners have searched for home insurance companies and failed. That is the very reason individuals across the US refer to it as a last resort. However, does it have to be your last resort too? Will you always get the best deals and coverage through the FAIR plan? Will the new insurance policy cover all the perils that are not under your control?

Here are a few steps you can take before applying for the FAIR plan –

  1. Look for insurance agents

The only way to find coverage for your high-risk home is by finding a reliable and genuine insurance agent. They are not difficult to find in any of the 50 states. They have the professional knowledge you might lack, and they have all the necessary resources for finding insurance policies for any high-risk building in your neighborhood.

It is understandable that “legacy” insurance carriers only deal with low-risk consumers and they might not have the privileges you are seeking. However, your insurance agent might be able to point you in the direction of another local insurance company; you may have never even considered. History shows us that it is indeed possible to find alternatives to the FAIR plan by allying oneself with professionals from the field of home insurance.

  1. What are your neighbors doing?

Unless you live in the middle of nowhere, you will have more than one family living in your high-risk area. There are thousands of homes in the tornado alley, and it is simply impossible that none of them have insurance.

If you are new in the area, throw a dinner party. Introducing yourself to your neighbors is a good idea before delving into the details of home insurance. Once you find out which companies have insured them, it should not be too much of a hassle to give those insurance companies a call. Asking your neighborhood store or community center for home insurance leads might also work out for you. A company that has insured homes in the area is highly likely to add another customer to their roster.

  • Get the best deals

What did you do when you were looking for a home to buy? Did you buy the first one you saw? Or, did you shop around a little bit? You might think that the residual market is restricted and you don’t have too many options, but once you begin looking at the right places you will be surprised!

Several specialty insurance companies and local companies provide coverage to the high-risk homes only. In fact, there is quite a competition among niche insurance providers in certain areas.

One way to reduce the monthly or annual premiums is by accepting a high deductible. That reduces the company’s financial risk significantly, and it lowers the monthly or yearly payments you make to the insurance company. If you accept a higher than the regular deductible, you need to make sure that you can pay off that amount when the need arises.

  1. Take care of your home

We know there is nothing you can do against the whimsies of nature, but not all threats are uncontrollable. You can reduce the danger of burglary by setting up secure locks on the doors and windows; you can set up alarms and cameras around the house. To mitigate the risk of water damage, you can take care of the plumbing, work on the siding and reinforce the foundations of the building.

These small investments can go a long way to reduce the monthly costs of home insurance and ensure appropriate compensations. It will also make it less complicated for you to find home insurance in any high-risk area. Since these improvements will cost you quite a bit, you should only invest in them if you plan on living in the house for years to come.

  1. Bundle insurance policies

Bundling is an excellent way to find home insurance in risky areas. You can bundle your home and car insurance. The company that provides coverage for your automobile is likely to offer a good deal since you are an existing customer. Even in case of bundled policies, you need to compare the prices and facilities the insurance companies in your area are ready to provide.

Since every state has a FAIR plan program, signing up for it is straightforward. However, you should only sign up for it once you have exhausted all five options we have provided above.

Leave a Comment