What the FAIR Plan Is

FAIR stands for Fair Access to Insurance Requirements. Every state with a serious catastrophe exposure has one. It is a pool, backed by the insurance companies licensed in the state, that writes basic property coverage for homes and businesses the regular market has turned down. It is not a charity and it is not a government program. It is the door that stays open when every other door closes.

In New Mexico, that door has gotten busy. As of January 2025, the Office of Superintendent of Insurance reported 7,210 residents and 280 business owners enrolled in the NM FAIR Plan. Many of them are in Lincoln and Otero County, and many of them are people who had a standard policy for twenty years before the non-renewal letter arrived. The state counted over 10,000 homeowners non-renewals between January 2021 and July 2024, and the FAIR Plan is where a lot of those households ended up.

What Changed in 2025

For years the FAIR Plan’s biggest problem was its limit. The maximum it would insure a home for was $350,000, which in Alto or Ruidoso after 2024 does not rebuild a house.

On July 14, 2025, the Office of Superintendent of Insurance announced that the maximum residential property limit had been increased from $350,000 to $750,000. That is a real improvement, and it makes the plan a workable answer for many more mountain homes than it was before.

It did not change what the policy covers. That is the part you need to understand.

What It Covers, and What It Does Not

A standard homeowners policy is written on what is called an open-perils basis for the dwelling: everything is covered unless it is specifically excluded. The FAIR Plan is a named-peril policy. It covers the causes of loss it lists, and nothing else. Fire is on the list. So are lightning, wind, hail, and a handful of others.

Here is what is typically missing or limited compared to the policy you used to have:

  • Liability. The FAIR Plan is property coverage. If someone is hurt on your land, the FAIR Plan does not defend you.
  • Personal property. Contents coverage is limited and may be optional.
  • Loss of use. The living expenses while you rebuild, which after a fire can run two years, are limited or absent.
  • Water damage, theft, and other everyday losses. If it is not a named peril, it is not covered.
  • Replacement cost. Depending on the form, the plan may settle on an actual-cash-value basis, meaning depreciation comes out of the check.

We say this on every one of our own intake forms, and we will say it here: surplus-lines carriers and the FAIR Plan may not provide all necessary insurance needs for a mortgage or your protection. Your lender’s requirements and your own protection are two different questions, and the FAIR Plan alone may not answer either one.

How to Make It Work

If the FAIR Plan is where your home has to be, there are ways to close the gaps.

A companion policy, sometimes called a difference-in-conditions or wrap policy, is written by a private carrier to sit alongside the FAIR Plan. It picks up the liability, the contents, the loss of use, and the perils the FAIR Plan leaves out. Together, the two policies get close to what a single homeowners policy used to do.

A separate umbrella adds liability above whatever the companion policy provides.

And mitigation is still the way out. The FAIR Plan should be a place you pass through, not a place you settle. Defensible space, a Class A roof, and ember-resistant vents are what move a home back into the surplus-lines market and, eventually, the standard market. We will build that file with you and re-shop the home every renewal.

Where to Start

If you are already on the FAIR Plan, bring us your policy. We will show you what it does and does not cover, quote the companion coverage, and tell you honestly whether any other market will take the home today.

If you have a non-renewal notice and you think the FAIR Plan is your only option, call us first. It usually is not.