Minnesota FAIR Plan:
What It Is and How to Get Out

The Minnesota FAIR Plan was established by state statute in 1968 for a single purpose: to make basic property insurance available to Minnesota homeowners, landlords, and businesses who have been unable to obtain coverage from any insurer in the private market. FAIR stands for Fair Access to Insurance Requirements.

The MN FAIR Plan is not an insurance company in the traditional sense. It is an association — a pool administered on behalf of all insurance companies licensed in Minnesota. Every licensed Minnesota insurer participates in the pool and shares the risk of FAIR Plan policies proportionally. The plan is regulated by the Minnesota Department of Commerce and operates under Minnesota Statutes Chapter 65A.

The MN FAIR Plan offers coverage for homeowners, tenant-occupied properties, seasonal homes, renters, townhome owners, farms, and small commercial properties. Coverage is basic — named perils only, not open perils — and is capped at the property's market value as determined by county assessor records or recent sale price.

Clients end up in the MN FAIR Plan through one of a few common paths:

• Multiple claims history — several claims in a short period can make a property uninsurable in the standard market, even if the claims were legitimate and weather-related.
• Property condition issues — deferred maintenance, old roofs, outdated electrical, foundation problems, or other physical conditions that standard carriers won't write.
• High-risk location — properties in areas with elevated loss history that standard carriers have stopped writing.
• Unique property type — properties that don't fit standard underwriting models (unusual construction, vacant periods, unconventional use).
• Inability to address required repairs — when a carrier issues a cancellation for property conditions and the repairs can't be completed before coverage lapses.

The application requires you to document the reason for each declination or cancellation from private market insurers. The FAIR Plan must inspect the property before coverage can be bound. Properties with unresolved hazardous conditions may be declined or written with a surcharge.

MN FAIR Plan coverage is basic and limited compared to standard homeowners policies. Key features:

• Named perils only — coverage applies only to specifically listed causes of loss (fire, lightning, windstorm, hail, explosion, riot, aircraft, vehicles, smoke, vandalism). This is significantly narrower than the open-perils coverage standard market policies provide.
• Coverage cap — limits cannot exceed the market value of the structure as determined by county assessor records or recent sale price. Debris removal up to $20,000 (or 50% of limit if limit is $40,000 or less) is included.
• No liability coverage — the MN FAIR Plan does not include personal liability. Clients in the FAIR Plan must obtain liability coverage elsewhere (a standalone liability policy or difference-in-conditions policy).
• Limited endorsements — few of the coverage enhancements available in standard market policies (replacement cost, service line, equipment breakdown, etc.) are available through the FAIR Plan.

MN FAIR Plan policies are generally more expensive than comparable voluntary market coverage. The plan is required by statute to price competitively with the standard market — but because FAIR Plan properties carry higher risk profiles (that's why standard carriers declined them), premiums reflect that elevated risk.

Premium is calculated based on the property's characteristics, location, construction type, and the coverage requested. Properties with unresolved condition issues may be subject to a surcharge. The FAIR Plan reviews pricing regularly and adjusts rates in line with market conditions.

Payment is made directly to the Minnesota FAIR Plan — agents are not authorized to collect premiums on behalf of the plan. Payments must be made payable to the Minnesota FAIR Plan, not to Options Insurance.

Getting back to the voluntary market is the goal. The path depends on why you ended up in the FAIR Plan:

• Address the property condition — if you were placed in the FAIR Plan due to roof condition, deferred maintenance, or other physical issues, repairing those conditions is the most direct path back. Once repairs are complete, we can shop your property with voluntary market carriers.
• Reduce claims frequency — if claims history was the trigger, time and a clean record are the remedy. Most carriers look at 3-5 years of claims history. Each claim-free year that passes improves your voluntary market options.
• Rebuild insurer relationships — Options Insurance actively monitors your eligibility for the voluntary market at each renewal. As your situation improves, we shop your risk with our 39 carrier partners to find a voluntary market solution.
• Supplemental coverage in the meantime — while in the FAIR Plan, we can help you obtain a standalone liability policy and other supplemental coverages to fill the gaps the FAIR Plan doesn't cover.