Colorado Launches FAIR Plan Insurer of Last Resort: 10 Things to Know

The Fair Access to Insurance Requirements (FAIR) Plan officially started issuing policies in April 2025, two years after Colorado enacted legislation establishing the organization.

The goal of the FAIR Plan is to help homeowners and businesses get insurance when they’re unable to do so through the open market.

To qualify for Colorado’s FAIR plan, you must have been declined by three admitted insurers.

Today, we’re explaining everything you need to know about Colorado’s FAIR Plan and how it works.

What is Colorado’s FAIR Plan?

Colorado’s Fair Access to Insurance Requirements (FAIR) Plan allows homeowners and business owners across the state to purchase insurance when unable to do so through the open market.

If you’ve tried to buy insurance for your home or business and have been denied at least three times, then the FAIR Plan is designed to help you get the coverage you need.

What’s the Point?

Insurance rates are rising quickly in Colorado. Some insurers are cancelling policies or pulling out of the state entirely. Colorado has multiple billion-dollar weather events each year, and risk continues to rise.

As risk rises, insurers raise costs. In some cases, insurers refuse to provide coverage entirely – say, to a property on the edge of a fire-prone forest, leaving homes and businesses unprotected.

Who Qualifies?

Colorado’s FAIR Plan has deliberately broad entry requirements. Generally, if you’ve been denied coverage by at least three insurers to date, you could qualify for the FAIR Plan:

• Applicants must have been declined coverage by three admitted insurers
• If you currently have homeowners insurance, then you don’t qualify for the FAIR Plan

In other words, the insurer is genuinely designed to be an insurer of last resort. If you’ve legitimately tried to buy insurance through the private market but were unable to do so, then you may be able to buy insurance through the FAIR Plan.

The organizers of the FAIR Plan expect the plan to cover approximately 1% of properties in Colorado, or around 29,000 structures. Generally, these properties are expected to be in high-risk areas across the state – like areas with a history of wildfires or a higher risk of future wildfires.

As of July 2025, the FAIR Plan is initially only accepting applications for residential properties. Eventually, the organization aims to cover both homeowners and business owners (commercial applications are expected by the end of 2025).

What Does Colorado’s FAIR Plan Cover?

Colorado’s FAIR Plan provides standard, actual cash value insurance coverage for homes and businesses across the state. Key coverages include:

• Basic coverage against losses caused by fire and lightning
• Limits of $750,000 for residential properties and $5 million for commercial buildings
• Additional coverages, like wind and hail, available for purchase
• Actual cash value coverage (not replacement cost coverage)

Overall, the goal is to offer basic coverage for homes and businesses with no other option.

Which Extra Coverages Can I Purchase?

The FAIR Plan offers basic, actual cash value coverage for losses linked to fire and lightning damage.

However, homeowners and business owners will be able to purchase extra coverage for things like:

• Personal property (contents) coverage
• Windstorm and hail coverage
• Riot or civil commotion coverage
• Vehicle coverage
• Smoke damage coverage
• Volcanic eruption coverage
• Vandalism and malicious mischief coverage

Yes, you can buy volcanic eruption coverage through the FAIR Plan, despite the fact that the last volcanic eruption in Colorado occurred 4,200 years ago at Dotsero Crater.

What’s Included?

The FAIR Plan has many of the same exclusions as other insurance policies.

The standard plan excludes coverage for windstorm and hail damage along with personal property coverage. However, you can purchase these coverages and add them to your plan.

All FAIR Plans, regardless of added coverages, exclude losses linked to:

• Ordinance or law
• Earth movement
• Water damage
• Power failure
• Neglect
• War
• Nuclear hazard
• Intentional loss
• Government action

FAIR Plans also exclude damages beyond a maximum of $750,000 (for residential policies) and $5 million (for commercial policies).

How Much Does Colorado’s FAIR Plan Cost?

The goal of the FAIR Plan isn’t to provide cheap coverage to homes and businesses. Instead, it’s designed to provide insurance, at a higher price, to residents who cannot obtain it through the open marketplace.

Here’s how Kelly Campbell explained the FAIR Plan’s pricing strategy in a statement to Insurance Business:

We are here to be a safety net, but it’s certainly not our goal to be the market of choice. We are a basic coverage option with higher costs that reflect the higher risk of the properties we insure.

Today, the average homeowner in Colorado spends around $4,489 per year on homeowners insurance, making Colorado the sixth most expensive state in the country (and 60.2% higher than the national average). The FAIR Plan covers higher-risk properties, so the average premium should be higher than that amount.

Here’s how the FAIR Plan website, meanwhile, explains the pricing structure of the system:

Due to the elevated risks associated with the residential and commercial properties we insure, FAIR Plan policies come with substantially higher premiums and offer more limited coverage.

How Many States Have FAIR Plans?

Most states have FAIR Plans. According to the Insurance Information Institute, 33 states plus Washington, DC have FAIR Plans.

Colorado is the first state to launch a FAIR Plan since Hawaii, which did so back in 1991.

Florida has the largest FAIR Plan in the United States: the state’s Citizens insurance company is the insurer of last resort and covers around 1.5 million homes statewide. California’s FAIR Plan Assn, meanwhile, covers around 450,000 homes across the state.

North Carolina, Louisiana, Massachusetts, and Texas also have larger-than-average FAIR Plans covering homes and businesses.

Who Runs the FAIR Plan?

Colorado’s FAIR Plan, like most other states’ FAIR Plans, is run by the insurance industry – not government employees.

Colorado developed the system with help from other states with similar systems.

The FAIR Plan was signed into law by the Governor of Colorado on May 12, 2023 as part of HB23-1288.

The Governor later appointed a board to run the FAIR Plan. That board submitted a Plan of Operation to Colorado’s Division of Insurance, which approved the plan on July 26, 2024.

The FAIR Plan board consists of a group of members from across the private insurance industry. There must be a certain number of members from each segment of the insurance space – like two individuals from the mutual property insurance space and one insurance producer licensed to write property and casualty insurance. Board members serve for three years.

Funding for the FAIR Plan comes from admitted insurance carriers across Colorado (but not excess or surplus lines carriers). Admitted carriers contributed an initial capital assessment of $46.5 million to stabilize and launch the FAIR Plan.

How to Apply

If you’ve been denied by at least three insurers to date and are unable to obtain insurance, then you can apply for Colorado’s FAIR Plan through the official website: https://www.coloradofairplan.com/.

Stephanie Corona

Stephanie is a property insurance claim expert with over 20 years of experience working as an insurance adjuster, expert witness, appraiser and umpire. She is passionate about sharing her expertise, knowledge, tips and training to help both property owners and Public Adjusters in their pursuit of effectively managing claims and recovering the claim settlement they deserve after a loss.