What are the Voluntary and Involuntary Insurance Markets?
The voluntary market is the standard insurance market where private insurance companies choose which properties they will insure and set the price of coverage. Most homeowners, and renters obtain insurance through the voluntary market.
The involuntary market, also called the residual market, provides insurance for people who cannot obtain coverage from private insurers. In Massachusetts, this market of last resort is the Massachusetts Property Insurance Underwriting Association (MPIUA) also known as the FAIR Plan. The Fair Plan provides property owners and renters with access to basic insurance coverage when they are unable to obtain it elsewhere.
Is the FAIR Plan an insurance company? How does it work?
The Fair Plan was created by state law and acts like an insurance company to provide property insurance to eligible applicants who are unable to obtain coverage in the voluntary market. However, the Fair Plan is not a state agency and is not state funded.
The MPIUA exists to provide “coverage of last resort” rather than compete with private insurers. It operates as a joint underwriting association, is backed by insurers who write basic property insurance in Massachusetts, and issues policies and collects premiums as a direct insurer.
The Massachusetts Division of Insurance regulates the Fair Plan, including the review and approval of its rates which are developed using several key factors, such as market share, home value, construction type, location, and safety features.
Why might I need coverage from the FAIR Plan?
You may need coverage from the Fair Plan if you are unable to obtain property insurance from a private insurance company.
This can happen if your property has been declined, cancelled, or non-renewed by an insurer. Insurers can take such an action for various reasons including, but not limited to, the condition of the property, the overall risk the property presents, and the amount of insurance business an insurer is willing to provide in a particular area.
Who is eligible for the Massachusetts FAIR Plan?
You may be eligible for the FAIR Plan if:
- Your property is residential (single family homes, multi-family dwellings, or a condominium unit)
- The property is in Massachusetts
- You can certify that a reasonable effort to obtain insurance has been made and you have been unable to obtain it elsewhere.
You must also meet some conditions, such as being able to show that you have taken reasonable steps to maintain the property, the property is not vacant or condemned, and there are no outstanding tax liens or penalties against the property.
Some commercial properties may also be eligible for limited Fair Plan coverage in certain circumstances.
What coverage options are available under the FAIR Plan?
The Massachusetts FAIR Plan offers basic property insurance coverage, which includes:
- Fire and smoke damage
- Vandalism and theft
- Limited liability claims
- Windstorm or hail
- Snow or ice collapse
- Damage from vehicles or aircraft
The FAIR Plan generally provides more basic property insurance than a standard homeowners policy but is relatively in line with coverage under the standard HO-3 policy. As with voluntary writers, flooding is not covered. However, as of 2025, new Fair Plan policy issued for properties within Special Flood Hazard Areas in communities overseen by the Massachusetts Office of Coastal Zone Management also requires the homeowner to purchase a separate flood insurance policy.
How do I apply for a FAIR Plan policy?
Most applicants apply through a licensed insurance agent or broker.
The usual steps are:
- Contact a licensed Massachusetts insurance agent or broker
- Submit an application to the MPIUA and complete the inspection process
- If eligible, a policy will be issued after the premium is paid
You can also apply directly through the Massachusetts Property Insurance Underwriting Association (without a broker) website.
Also see:
Will being on the FAIR Plan make it harder to obtain other insurance in the future?
No, the FAIR Plan is a safety net, not a punishment. You will not be charged more by a voluntary insurer because you were on the FAIR Plan in the past.
How do I get off the FAIR Plan?
If you search for and find a voluntary insurer who is willing to provide you coverage, you can cancel your FAIR Plan though submitting a form from the MPIUA website. However, ensure that your new private policy is active before you cancel your Fair Plan policy so there is no gap in your coverage.
Who can I contact with questions about the Massachusetts FAIR Plan?
For more information, you may contact:
Massachusetts Property Insurance Underwriting Association (FAIR Plan)
Phone: (617) 723-3800
Toll-Free: (800) 392-6108
Website: www.mpiua.com