New Colorado program helps protect uninsured homeowners in high-risk areas

DENVER, Colo. (KRDO) – Colorado homeowners struggling to find affordable coverage – or in some cases, coverage at all – due to the state's large wildfire and hail risks will now have a new last-resort option for support.

The Colorado Fair Access to Insurance Requirements (FAIR) Plan went live on Thursday. The new state program will offer limited property insurance coverage to homeowners in high-risk areas who have been denied by at least three private insurers.

The FAIR Plan was established through legislation signed by Gov. Jared Polis in May 2023 to ensure that homeowners and businesses in high-risk areas still have access to basic property insurance. Created as a last-resort option, the plan addresses situations where traditional insurers refuse coverage due to factors like a property's location, claim history, or overall vulnerability.

While coverage is limited, the FAIR Plan offers a crucial safety net for those who have exhausted all other insurance options.

The plan is now accepting applications for residential properties, with commercial coverage expected later this year.

Eligibility

According to the Colorado FAIR Plan website, to qualify for the program, applicants must prove they’ve been denied coverage by three standard insurance companies. Homeowners who already have active insurance policies do not qualify.

Licensed insurance agents will be available to help residents determine their eligibility and will be able to submit applications directly if it's determined the plan is a good fit for a customer.

What’s Covered—and What’s Not

The FAIR Plan offers only basic property insurance to homeowners with a $750,000 limit. Its coverage is limited to essential homeowner protections, like fire and lightning – meaning the plan's policies are stripped down compared to standard homeowner's insurance.

Notably, FAIR Plan coverage excludes liability coverage and theft and water damage coverage, and offers only limited personal property coverage.

According to the FAIR Plan website, customers will have the option to purchase limited extended coverage for things like windstorms, hail, explosions and vandalism.

Due to the elevated risk associated with properties under the FAIR Plan, its premiums are significantly higher than typical policies, according to the plan's site. Standard insurance remains the most cost-effective and comprehensive option.

For more information on the Colorado FAIR Plan, click here.