The New Jersey Underwriting Association or FAIR Plan

For property owners and buyers in New Jersey, there are areas and other risks where the private insurance market is unwilling to offer homeowners insurance coverage. In fact, when a property owner is rejected by a private insurer, the applicant is provided information about the New Jersey Underwriting Association or FAIR Plan. The FAIR Plan is set up to offer coverage for basic property coverage, mobile homes, rental units and commercial buildings.

The New Jersey Underwriting Association or FAIR Plan was created by the legislature in 1968 to provide essential property insurance to any property owner who is unable to obtain insurance in the private marketplace. Over the years, the administration has become the administrator of the FAIR Plan, the Crime Indemnity Plan and the Windstorm Market Assistance Program. The New Jersey Underwriting Association (NJIUA) is considered a market of last resort and does not seek out customers and will not encourage producers to place home insurance business with them.

The FAIR Plan is made up of members of private insurance companies offering insurance products in the state and is overseen by a board of directors with extensive experience in the insurance industry. The association offers many guides for the consumer with educational information about the perils common to the state of New Jersey and the affect on homeowners insurance.

Since the FAIR Plan program is a market of last resort, rates are often higher for more restrictive coverage than the private market insurers. In addition to the risks caused by the cold temperatures, hail and heavy snowfall, New Jersey has the risk of hurricanes. As far as hurricane landfalls, historically New Jersey has been lucky but recent events such as Hurricane Sandy have left insurance companies labeling thousands of homeowners as “high risk.” Those struggles cause hardships in the form of rate increases, cancellations, and non-renewals are expected to continue as well as an increase in consumers purchasing their homeowners insurance from the New Jersey FAIR Plan.

As with all FAIR Plans, consumers are urged to try to find coverage in the private market and we can help you find an agent that can help you find alternatives to the FAIR Plan.