Iowa FAIR Plan Alternative

The state of Iowa joined many other states in 1968 when the Urban Property Protection and Reinsurance Act was passed in order to enable the FAIR Plan to meet the needs of homeowners in the state who have been deemed high risk. The Iowa FAIR Plan was setup to be the market of last resort and as such will only offer coverage to consumers who are unable to obtain it in the private market often due to filing too many home claims.

The Iowa FAIR Plan will provide coverage for qualified dwelling and commercial properties. There are conditions however when the FAIR Plan will decline coverage. For dwelling coverage, the IFP may decline to issue policies when:

The dwelling is vacant or in foreclosure.
The dwelling has unsafe or high risk conditions.
Defective heating, wiring, plumbing and very poor physical condition.
Unsettled or unpaid claims from previous losses.
Wood burning stove that is not professionally installed or is in a mobile home or garage.
More than two losses in the prior 12 month period or more than 3 in the prior 24 months.

The maximum limit on combined dwelling and contents is currently $250,000 and the home policy limit cannot exceed the actual cash value of dwelling and contents.

Iowa is a relatively low risk state but there is a history of severe winter weather, torrential rain storms, flood waters and scorching draughts about every 10 years. Currently tornadoes and snowstorms are the most common natural disasters and home insurance companies are having to deal with severe losses as a result of not anticipating the occasional higher risk in some years.

Even with the previously mentioned disasters, Iowa citizens are paying less for homeowner’s insurance than the national average due to lower claim volume and severity. Average annual premiums for 2015 appear to be $734 which falls well below the $952 national average. Like other FAIR Plans, the Iowa FAIR Plan is considered the insurer of last resort and homeowners insurance coverage should be sought in the private marketplace.

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.