As an insurer of last resort, the FAIR Plan receives applications for many varied types of buildings. Following are several of the more common factors that can impact insurability of and cost of insuring a building.
EXISTING BUILDING DAMAGE – The FAIR Plan will not insure any building(s) with existing damage UNLESS a copy of a repair contract signed by the applicant and an independent licensed contractor is submitted with the application.
The contract must stipulate the scope of work needed to repair the damage and indicate the estimated completion date for the repairs.
VACANT BUILDINGS – The FAIR Plan will not offer insurance on any building that has been substantially vacant or unoccupied (more than 50% of the building area is vacant or unoccupied) for one (1) year or longer prior to the date the application was received in the FAIR Plan office. All substantially vacant or unoccupied buildings potentially eligible for coverage are inspected.
To be considered for coverage, substantially vacant or unoccupied buildings must be in good condition with all doors and windows secure and no broken windows.
An applicant may seek to purchase a vacancy permit which affords coverage for the Vandalism or Malicious Mischief (VMM) peril if a building is substantially vacant or unoccupied for more than thirty days. There is a higher premium applied to this coverage, since substantially vacant or unoccupied buildings are subject to a higher frequency and severity of loss than other buildings.
INSPECTIONS – Buildings insured by the FAIR Plan must be in insurable condition and are inspected or not depending on the age and occupancy of the building. In general, inspectors look at the physical condition of the building(s), occupancy, and hazards related to the coverage provided under the policy. Inspectors do not determine if the building is safe or if the type or amount of coverage ordered by the applicant is sufficient.