The Colorado Fair Access to Insurance Requirements (FAIR) Plan, created by House Bill 23-1288, is an insurer of last resort for property owners who can't get coverage through the standard Colorado home insurance market. FAIR Plan coverage is available to homeowners, homeowners associations (HOAs), and businesses in the Centennial State, though individual homeowners make up the bulk of applicants so far.
The Colorado FAIR Plan explained
Signed into law in 2023, Colorado HB 23-1288 established the Colorado FAIR Plan. FAIR Plans exist in more than 30 states, providing coverage for property owners who can't find insurance through the private market because insurers consider their property too high-risk to cover.
For qualifying homeowners, the FAIR Plan provides up to $750,000 in coverage for a home and its contents.
Coverage is paid out differently than a typical private policy, too. The FAIR Plan pays claims based on actual cash value (ACV) — the value of your property after accounting for depreciation, like age and wear and tear — rather than replacement cost value (RCV), which covers what it would actually cost to rebuild or repair today. In practice, that means a FAIR Plan payout may fall short of what you'd need to fully repair or rebuild after a covered loss.
Learn more: Replacement cost vs. actual cash value
Who's eligible for the Colorado FAIR Plan?
Not everyone can sign up for the Colorado FAIR Plan, but if you genuinely can't get coverage anywhere else, you'll likely qualify. To get approved for coverage:
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You must be able to prove you were denied coverage by at least three private insurance companies.
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Your property must be considered uninsurable due to high-risk factors. Wildfire exposure is the most common reason, but the Colorado Department of Regulatory Agencies also lists location, claims history, and the age of the home as examples.
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Properties are also subject to an inspection before a policy is issued, and the FAIR Plan can deny coverage if your property doesn't meet its requirements.
Pro tip: Colorado officials have been clear that the FAIR Plan is meant to solve an availability problem, not an affordability one. You can't qualify simply because private coverage is too expensive — you need proof that insurers have actually turned you down.
Colorado FAIR Plan coverage limitations
The Colorado FAIR Plan can be a valuable safety net, but it comes with real tradeoffs homeowners should understand before relying on it.
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Limited perils: Not every type of damage is covered. FAIR Plan policies only cover losses from covered events (called perils in insurance speak) like fire, lightning, windstorms, hail, explosions, riots, civil commotion, aircraft, vehicles, smoke, volcanic eruption, vandalism, and malicious mischief. Notably, it doesn't cover water damage, flooding, or liability.
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Actual cash value payouts: Because claims are paid on an ACV basis, a payout may not fully cover the cost of repairing or rebuilding your home.
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Coverage cap: The FAIR Plan caps payouts at $750,000, so homes worth more than that won't be fully covered.
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Higher cost: FAIR Plan policy costs (called premiums) are typically more expensive than standard market coverage, since it's built to cover higher-risk properties.
If you're struggling to find coverage, work with a licensed insurance agent who can help you explore every option in the private market first. The FAIR Plan is meant to be a last resort, not a starting point.
What the Colorado FAIR Plan means for HOAs
Homeowners associations can also turn to the Colorado FAIR Plan when they can't get a master policy — the shared insurance policy that covers an HOA's buildings and common areas — through the private market.
The Colorado Common Interest Ownership Act (CIOA) requires HOAs to carry property insurance covering their buildings' common areas and structures, which can include:
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Lobbies
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Pools
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Gyms
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Roofs
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Exterior walls
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Fixtures within units
CIOA also requires HOAs to carry general liability insurance. But in high-risk parts of the state — particularly mountain communities exposed to wildfire and areas near the Nebraska and Wyoming borders prone to damaging hailstorms — many HOAs have struggled to meet that requirement through standard insurers. The Colorado FAIR Plan is meant to fill that gap, though it isn't designed to replace a traditional commercial policy long-term. It's meant to be a short-term safety net while an HOA works with its insurance agent to find private market coverage. Taking wildfire and hail mitigation steps can improve an HOA's odds of approval down the road.
For qualifying commercial properties, the FAIR Plan provides up to $5 million in coverage for the property and contents, per building.* HOAs face the same eligibility rules as homeowners — proof of three declinations and a qualifying high-risk factor — plus one HOA-specific restriction: the Department of Regulatory Agencies (DRA) explicitly forbids an HOA from altering its governing documents to subdivide a community into separate buildings just to qualify for coverage under the cap.
Because payouts are based on actual cash value rather than replacement cost, a FAIR Plan payout may leave a funding gap after a major loss — one that can lead to a special assessment, which is an extra charge HOAs bill to homeowners to cover costs the association's budget or insurance doesn't.
Commercial property owners and managers should always work with a licensed insurance agent when exploring FAIR Plan coverage for an HOA, and consult the Colorado HOA Center Advisory for guidance if you're struggling to secure a proper master policy.
*The Colorado DRA defines a building as "a single building with at least 100 feet of distance between it and any other insured building."
Frequently asked questions
How much does the Colorado FAIR Plan cost?
The actual cost of a Colorado FAIR Plan will depend on the value of the property, its location, and the specific risks it faces. However, as an insurer of last resort, the Colorado FAIR Plan is typically more expensive than private coverage.
What is the maximum payout under the Colorado FAIR Plan?
For homeowners, the maximum payout is $750,000 under the Colorado FAIR Plan. Commercial properties, including those owned by HOAs, can qualify for up to $5 million in coverage per building.
How is the Colorado FAIR Plan funded?
The law that established the Colorado FAIR Plan requires that premiums be "actuarially sound" — meaning they generate enough revenue to cover expected losses, related expenses, and the cost of reinsurance. The FAIR Plan can also collect fees from member insurance companies to help fund its operations, and those insurers can then recoup the cost through a surcharge on their own policyholders.
Does the Colorado FAIR Plan cover HOAs and commercial properties?
Yes. Commercial properties, including HOA-owned buildings, can qualify for up to $5 million in coverage per building — a higher cap than the $750,000 available to individual homeowners. Coverage pays out on an actual cash value basis. HOAs face the same eligibility requirements as homeowners, plus additional rules specific to how buildings are defined for coverage purposes.
