For many customers of the Massachusetts Fair Plan, the main question asked is "Do I have any other options?" The answer is generally yes, but it's instructive to discuss the social purpose of the Fair Plan first so as to understand how some people end up buying their insurance here.
The term "Fair Plan" is short for Fair Access to Insurance Rates, and was conceived in the aftermath of riots in the 1960s which made urban neighborhoods difficult to insure. Many states have their own version of this kind of insurance resource, with different models working in different states. The Massachusetts Property Underwriting Insurance Association (MPIUA) is the official name of the Massachusetts version and is synonymous with "the Massachusetts Fair Plan."
Insurance agencies will use the Fair Plan for homeowners who have a profile that is difficult to insure. Today the most common example is coastal property, which many companies choose to avoid. If an agent has only three or four homeowners companies and none of them will insure properties within two miles of the water, the go-to carrier is the Fair Plan.
At Gordon Atlantic Insurance we represent many companies. and are located only 3.2 miles from the ocean ourselves. We have the markets to insure homes right on the beach without having to use the Fair Plan.
Some people still choose the Fair Plan over private market alternatives, usually for price. Because of subsidies and regulatory flexibility built into their operations, Fair Plan premiums can be well below market. But buying only on price can be shortsighted. The main concern is how well the Fair Plan could handle a major coastal catastrophe, such as a hurricane. With a high concentration of homes on the coast, the ability of the Fair Plan to handle the demand is a questionable issue. We prefer to work with carriers with a broad geographical reach, and who can bring assets into an area quickly and efficiently. After all, insurance is about getting claims paid quickly and fairly.
For non-coastal properties, our broad market reach can usually find consumers better choices. If you're in the Fair Plan now because you had a couple claims with your previous carrier, we look to other options including higher deductibles, consideration for your mitigation efforts, and other subjective approaches.
In short, if you're with the Fair Plan, let Gordon Atlantic Insurance offer you options.