Washington FAIR Plan Homeowners Insurance Alternative

Established in 1968 by the state legislature, the Washington FAIR Plan offers basic property insurance for home owners who have had trouble obtaining coverage in the private insurance marketplace after being deemed high risk. This is usually due to filing claims on their home but often simply because of where it is located. All property insurers in the state have a mandatory membership in the FAIR Plan and take part in its administration. Coverage is available from the Washington FAIR Plan for both residential and commercial properties and their contents but liability, theft, and loss of use may not available. The homeowners policies are often insured on an actual cash value basis.

The state of Washington ranks very low compared to other states for tornado activity however, the state is in the top 3 for earthquake activity and in the top 6 for potential volcano risk. Other extreme weather activity includes avalanches, thunderstorms, flooding, hail, wildfires, heavy snow and severe windstorms causing thousands of claims and residents a year to be labeled as high risk homeowners. Washington has suffered from over 12 earthquake events that have measured 5.0 or above. It is interesting to note that with all of the previously mentioned weather activities, Washington still does not rank in the top 10 states that are most at risk for major disasters.

Since historical risks and claims play a big part in the rating of home insurance costs, one would think that rates would be in the upper tier in Washington but such is not the case. For 2015 Washington’s average premium at $645 which ranks well below the national average of $952 annually. In fact, Washington ranks in the bottom 5 for annual homeowner’s insurance premiums nationally due to the lower claim volume and overall risk.

In the areas of the state where many of the private insurers fear to offer coverage due to the high homeowners risk, consumers can elect to purchase from the Washington FAIR Plan if they are willing to forgo the value of a policy with comprehensive coverage.

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.