Here's a situation no Massachusetts homeowner wants to face: you've applied for homeowners insurance with multiple companies, and they've all turned you down. Maybe your house is too close to the coast. Maybe it's older and needs updating. Maybe you've had a few claims in the past. Whatever the reason, you're stuck without coverage—and you can't get a mortgage or refinance without it.
That's exactly when the Massachusetts FAIR Plan comes in. Officially called the Massachusetts Property Insurance Underwriting Association (MPIUA), the FAIR Plan is your insurance safety net—a state-mandated program that provides basic property coverage when nobody else will. Think of it as coverage of last resort, designed to ensure that every eligible Massachusetts homeowner can get the protection they need, even if they're considered high-risk.
What Is the Massachusetts FAIR Plan?
The Massachusetts FAIR Plan isn't actually an insurance company in the traditional sense. It's a pool of insurers who are required by state law to share the risk of insuring properties that standard insurance companies won't touch. Every insurance company doing business in Massachusetts contributes to the FAIR Plan based on their market share.
The program offers three types of policies: Homeowners coverage (for owner-occupied single-family homes), Dwelling Fire policies (for rental properties or homes that don't qualify for homeowners coverage), and Commercial Property coverage. Most people end up with a standard homeowners policy through the FAIR Plan, which covers the same basic perils you'd expect—fire, wind, hail, theft, and liability.
But here's the catch: the FAIR Plan provides basic coverage, not comprehensive protection. You won't get all the bells and whistles that come with standard policies. And you'll pay more for less coverage—typically 15-30% higher premiums than you'd pay in the regular market, with fewer discounts available.
When Do You Need the FAIR Plan?
You can't just decide to use the FAIR Plan because you think it might be cheaper or easier. To qualify in Massachusetts, you need to demonstrate that you've been turned down by at least two standard insurance companies. This requirement ensures the FAIR Plan serves people who genuinely need it, without competing with the standard market.
Common reasons homeowners end up in the FAIR Plan include living in coastal areas with high hurricane or storm risk, owning older homes that don't meet modern building codes, having a history of multiple insurance claims, owning properties with outdated electrical or plumbing systems, or having homes located in areas with poor fire protection. Sometimes it's just bad luck—you bought a beautiful Victorian home near the ocean, and standard insurers consider it too risky.
Your property also needs to meet basic safety standards. Homes with significant hazards or code violations typically won't qualify until those issues are addressed. The MPIUA's inspection bureau will likely examine your property to verify eligibility and determine appropriate rates. They're looking for deal-breakers like major structural damage, severe code violations, or properties that are vacant or condemned.
Coverage Limits and 2025 Changes
Here's something important that changed recently: starting February 1, 2025, all new FAIR Plan policies must carry Coverage A (dwelling coverage) at a minimum of 90% of the home's estimated reconstruction cost. This is an increase from the previous 80% requirement, and it's designed to ensure homeowners have adequate coverage to actually rebuild if disaster strikes.
If you're not ready to meet that 90% requirement, the FAIR Plan offers two endorsements. The HO 04 56 Special Loss Settlement Endorsement lets you insure your property at 50%, 60%, or 70% of replacement cost while still receiving full replacement cost coverage in a claim. The HO 04 81 Actual Cash Value Endorsement is another option, but be warned: if you don't add any endorsement and your Coverage A falls below 90%, MPIUA may automatically settle future claims on an actual cash value basis, which means you'll get the depreciated value of your home, not what it costs to rebuild it.
The FAIR Plan caps basic dwelling coverage at $1 million. For years, this created a problem for homeowners with higher-value properties. If your home's replacement cost was $1.5 million, you could only get $1 million in coverage through the FAIR Plan, leaving you seriously underinsured. The good news is that you can now purchase excess and surplus coverage to fill that gap. If 90% of your home's estimated replacement cost exceeds $1 million, you'll need to either buy separate excess insurance or add the HO 04 56 endorsement to ensure adequate protection.
What You'll Pay
Let's be honest: FAIR Plan coverage is expensive. Premiums typically run 15-30% higher than what you'd pay for similar coverage in the standard market. That's partly because the FAIR Plan insures riskier properties, and partly because it doesn't offer the multi-policy discounts, claims-free discounts, or other incentives that standard insurers use to compete for customers.
Your premium depends on several factors: where your property is located, how close you are to the coast, your home's construction type and age, your claims history, and the deductible you choose. Location matters enormously. A home in coastal Massachusetts faces different risks than one in central parts of the state. Properties near the coast often face significantly higher premiums due to increased exposure to storms and potential flooding.
Interestingly, the FAIR Plan hasn't filed to revise its annual average rates since 2013, according to state regulatory data. But that doesn't mean your individual premium won't change based on your specific risk factors. Massachusetts law requires FAIR Plan rates to be actuarially sound—they need to reflect the actual risk of insuring properties without being excessive or discriminatory. The Division of Insurance reviews all rate filings to ensure compliance.
How to Apply for the FAIR Plan
The application process starts with getting rejected. You'll need documentation showing that at least two standard insurance companies have declined to cover your property. Save those rejection letters—you'll need them as proof of eligibility.
Be prepared for a property inspection. The MPIUA will want to assess your home's condition, verify that basic safety standards are met, and identify any issues that might affect your premium or eligibility. They're looking at things like roof condition, electrical and plumbing systems, overall structural integrity, and any obvious hazards. If the inspection reveals problems, you may need to make repairs before coverage is approved.
Once approved, your policy works like any other homeowners insurance. You'll pay your premium, file claims when necessary, and renew annually. The key difference is that you should keep shopping around in the standard market. The FAIR Plan is meant to be temporary. As you improve your property, maintain a claims-free record, or as market conditions change, you may become eligible for standard coverage again—usually at a lower cost with better benefits.
The Massachusetts FAIR Plan exists to ensure that property owners who've been turned away by standard insurers still have access to essential coverage. While it costs more and provides less comprehensive protection than you'd get in the voluntary market, it beats the alternative of going uninsured. If you're struggling to find homeowners insurance through traditional channels, the FAIR Plan gives you a path forward. Talk to a local insurance agent about your options, get your documentation together, and take the first step toward protecting your most valuable asset.
