What Is the Colorado FAIR Plan — and How Does It Compare to Regular Homeowners Insurance?
If you’ve been declined for Colorado homeowners insurance, you may have been told the Colorado FAIR Plan is your next option.
With increased wildfire risk, hail losses, and tighter underwriting standards, more homeowners across Colorado are running into this situation.
So what is the Colorado FAIR Plan?
How does it compare to regular homeowners insurance?
And is it your only option?
Let’s walk through it clearly.
👉 Official Colorado FAIR Plan website:
https://www.coloradofairplan.com/
Here is a great brochure that shows how a FAIR policy compares to a regular homeowners insurance policy:
What Is the Colorado FAIR Plan?
The Colorado FAIR Plan (Fair Access to Insurance Requirements Plan) is a state-mandated insurance program that provides property insurance for homeowners who cannot obtain coverage in the traditional market.
It’s often described as “last resort homeowners insurance.”
It exists to ensure homeowners can still meet lender insurance requirements when private insurance carriers decline coverage.
Why Are More Homeowners Being Referred to the FAIR Plan?
Over the last several years, Colorado’s insurance market has tightened due to:
- Increased wildfire losses
- Severe hail activity
- Rising rebuilding costs
- More conservative underwriting
If you haven’t already, I recommend reading my article on:
👉 [How Wildfires Spread and Why Embers Are the Real Risk]
Embers — not flames — are responsible for many home ignitions, which has changed how carriers evaluate wildfire exposure.
You can also review general wildfire mitigation guidance from the Colorado State Forest Service:
https://csfs.colostate.edu/wildfire-mitigation/
Because of this environment, some carriers have:
- Pulled back from wildfire-exposed ZIP codes
- Tightened roof age requirements
- Reduced appetite for older homes
When multiple carriers decline a property, the Colorado FAIR Plan may become an option.
Colorado FAIR Plan vs Regular Homeowners Insurance
Understanding the difference is critical before accepting coverage.
Coverage Comparison
Standard Colorado Homeowners Insurance (HO-3 policy) typically includes:
- Dwelling coverage
- Personal property coverage
- Liability protection
- Additional living expenses
- Broad “open peril” protection
Colorado FAIR Plan coverage:
- Primarily covers the structure
- Has more limited covered perils
- Does not automatically include liability coverage
- May require a separate Difference in Conditions (DIC) policy
In many cases, the FAIR Plan by itself does not provide the same level of protection as a standard homeowners policy.
Cost Differences
The Colorado FAIR Plan is often:
- More expensive relative to coverage
- Higher deductible
- Less customizable
For context on rising premiums statewide, see:
👉 [Why Colorado Home Insurance Rates Have Increased in Recent Years]
The FAIR Plan exists for availability — not competitiveness.
Underwriting Differences
Traditional carriers evaluate:
- Roof age and condition
- Claims history
- Defensible space
- Wildfire exposure
- Construction materials
Improving defensible space or replacing an aging roof can sometimes move a property out of FAIR Plan eligibility and back into the traditional market.
Is the Colorado FAIR Plan a Good Option?
The FAIR Plan plays an important role. If any other insurance company can or will insure your home, in most cases, you will want to go with that. Only go with the FAIR plan if it is your LAST resort.
Frequently Asked Questions
Is the Colorado FAIR Plan only for wildfire areas?
No. While wildfire exposure is a common reason, any property declined in the traditional market may qualify.
Does the FAIR Plan include liability coverage?
Generally no. Liability coverage typically requires a separate policy.
Is it more expensive?
Often yes — especially considering its limited coverage structure.
Can I move back to regular homeowners insurance later?
Yes. If underwriting conditions improve — such as roof replacement or wildfire mitigation — you may qualify for traditional Colorado homeowners insurance again.
Is the FAIR Plan my only option if I’m declined?
Not always.
Before accepting the FAIR Plan, it may be worth:
- Shopping additional carriers
- Exploring surplus lines options
- Adjusting deductibles
- Improving property risk factors
Each property is unique.
Final Thoughts
The Colorado FAIR Plan is an important safety net in today’s insurance environment — particularly in a state facing increasing wildfire exposure.
But it is usually a last-resort option, not a long-term strategy.
If you’ve been told the FAIR Plan is your only option, it may be worth reviewing your situation carefully to determine whether additional coverage options exist.
Your home is one of your largest investments. How it’s insured matters.
If you’d like a second review of your Colorado homeowners insurance options, I’m happy to help.
— Jared