The Texas FAIR Plan: when it's an option and what it covers

What is the Texas FAIR Plan, and why does it exist?

The short answer: The Texas FAIR Plan Association is a residual-market insurer the Texas Legislature created to provide basic property coverage for eligible Texans “when no one else will.” It's a safety net, not a competitor to regular homeowners insurance.

In its own words, the Texas FAIR Plan Association was created by the Legislature to provide property insurance for eligible Texans when no one else will, and it “does not compete with the private market.” It's there for homes the regular market has turned away.

According to the Texas Department of Insurance FAIR Plan overview (June 2026), TFPA's policy types include a Homeowner policy (HO-A), a Dwelling policy for rentals (TDP-1), a Condominium policy (HO-CONB) and a Tenant policy (HO-BT).

Being declined isn't a personal failure. But the gaps in a FAIR Plan policy are real, so know what you're buying.

One note: our team serves Texas statewide outside the 14 coastal counties and four Galveston Bay cities, which are outside our service area, so this guide is written for inland homeowners.

Who qualifies for the Texas FAIR Plan?

The short answer: You generally qualify if at least two insurance companies have declined to cover your home and you don't have a valid offer of comparable residential coverage. Surplus-lines offers don't count as comparable.

Per TDI's overview, you must have been declined residential property insurance by at least two insurance companies and have no valid offer of comparable residential coverage. Surplus-lines offers don't count as comparable.

The property has to fit too: owner-occupied one- and two-family homes, townhouses and condos, plus one- and two-family rentals and tenants' belongings.

What does a Texas FAIR Plan policy cover?

The short answer: A FAIR Plan homeowners policy (HO-A) covers a named list of perils, including fire, lightning, wind and hail, with liability and theft included on homeowner, condo and tenant policies. Claims are paid at actual cash value unless you add replacement cost to an HO-A policy.

The FAIR Plan uses named-peril coverage: if a cause of loss isn't on the list, it isn't covered. TDI's guide to Texas homeowners policies describes HO-A as a named-perils form; here's what the TFPA summary of coverages lists.

Actual cash value is the default

FAIR Plan claims are settled at actual cash value, which subtracts depreciation for age and wear. On an HO-A policy you can add replacement cost for the dwelling and contents for an extra premium; it isn't available on the TDP-1 rental policy. TDI's replacement cost vs. ACV guide shows why it matters: on a $10,000 roof with a $4,000 deductible, replacement cost pays $6,000 at any age, while ACV pays $3,000 on a ten-year-old roof and nothing on a 20-year-old one (TDI's general example, not FAIR Plan figures).

How is FAIR Plan coverage narrower than a standard Texas homeowners policy?

The short answer: A FAIR Plan policy covers only the perils it names, so common losses like freezing, water discharge, mold, falling objects, collapse and glass breakage are excluded. That's a real difference from the broader coverage many Texas homeowners are used to.

In our experience reviewing Texas home policies, this is the part people miss: they assume a FAIR Plan homeowners form works like the policy they just lost. It doesn't. TDI describes the coverage as narrower than a standard policy, and exclusions include:

• Freezing and the weight of ice and snow.
• Water discharge, like a leaking water heater or plumbing line.
• Mold.
• Falling objects and collapse.
• Glass breakage.

Flood isn't on the list either, and TDI's home insurance tips note “home insurance policies don't cover flood damage.” Flood is a separate policy, and FEMA notes a National Flood Insurance Program policy typically takes 30 days to become active.

If you want a refresher on how standard Texas homeowners forms are built, our Texas homeowners insurance guide explains the standard policy forms.

What deductibles does the Texas FAIR Plan use starting July 1, 2026?

The short answer: For FAIR Plan homeowners policies effective July 1, 2026, the wind/hail deductible starts at 2% of dwelling coverage (options of 2%, 3%, 4% or 5%), and the all-other-perils deductible ranges from 1% to 5%.

TFPA announced in April 2026 that the 1% wind/hail deductible option is gone for homeowners policies starting July 1, 2026. Here's how the new rules work:

• Wind/hail: 2%, 3%, 4% or 5% of your dwelling coverage.
• All other perils: options from 1% to 5%.
• Split deductibles are allowed, so your wind/hail and all-other-perils percentages can differ.
• Existing 1% wind/hail policies move to 2% at renewal.
• No mid-term changes: you can't change your deductible during the policy term.

The bigger your dwelling limit, the bigger your share of every wind or hail claim. Our guide to hail and your Texas home covers roof claims in more detail.

Not sure what a 2% or 5% deductible means in dollars for your home? Start a free review or call (512) 691-6400 and we'll work through the math with you.

How do you apply for the Texas FAIR Plan, and how long can you stay?

The short answer: You apply through a licensed Texas property and casualty agent who is authorized by TFPA to submit applications. Policies are written for one year, and you must reapply in the regular market every two years.

TDI's overview is clear: FAIR Plan “coverage must be obtained through an authorized licensed Texas agent.” That means an agent licensed for property and casualty insurance in Texas and authorized by the FAIR Plan to submit applications. You can't buy directly. TDI also lists the FAIR Plan number, 800-979-6440, for homeowners who can't find coverage.

Two timing rules apply:

• One-year terms, renewed annually.
• Back to the regular market every two years. TDI says policyholders must reapply in the voluntary market every two years. It's a bridge, not a permanent home.

What should you do after a nonrenewal before turning to the FAIR Plan?

The short answer: Get the written reason, use your 60-day notice window, fix any condition issues the insurer named, and ask a licensed agent to review what standard coverage options are available for your home. The FAIR Plan is a backstop for when those steps come up empty.

A nonrenewal isn't immediate. According to TDI's canceled or nonrenewed home insurance page (updated January 2026), insurers must give you 60 days' notice for policies bought or renewed in 2024 or later (30 days for 2023 or earlier). Grounds include three or more non-weather claims in three years, 60+ days vacant, or poor condition, but an insurer can't nonrenew you for a claim your policy didn't cover.

1. Read the written reason
   Under HB 2067 the insurer must explain it in writing: roof, claims, vacancy or something else.
2. Mark your deadline
   Count the 60 days (30 for older policies) so you can act without a gap.
3. Fix condition issues you can
   If the letter names a worn roof, wiring or plumbing, get repair estimates.
4. Document everything
   Keep invoices, photos and inspection reports.
5. Ask about your coverage options
   Call (512) 691-6400 or start a free review. We'll look at whether standard coverage options are available for your home, subject to underwriting.
6. Treat the FAIR Plan as the backstop
   Declined twice with no comparable offer? A licensed agent authorized by TFPA can submit your application.

A note on roof and home age. In September 2026, TDI proposed clarifying its rules so insurers can't decline or nonrenew a policy based on the age of a house or its roof, while still allowing them to consider the current condition of the home and parts like roofing, wiring, heating, air conditioning, plumbing and siding. As of October 2026, that's a proposal with no effective date announced, so don't count on it changing a decision yet.

In our experience, homeowners who bring the written reason and photos of the house get clearer answers, faster. We can't promise an outcome, but we'll tell you honestly where things stand. See our home insurance page.