Assigned risk plans are probably best know in the auto insurance market because they exist in every state. An assigned risk plan allows drivers to obtain auto insurance if they are unable to buy it in what is called the regular, or voluntary, market. Generally when you can’t acquire insurance in the voluntary market, you’re known as a high risk driver. That’s when assigned risk comes in.

Your state’s assigned risk plan is made up of all the insurers selling auto insurance in your state. It is that simple. They are assigned drivers to insure based on a formula that consists of the amount of insurance they sell in the regular market along with other company related factors.

This market is also called the residual market. The residual market has another component referred to as FAIR Plans. Regardless of what they are called, they exist to provide coverage for those who cannot get it in the regular market.

FAIR Plan is the acronym for Fair Access To Insurance Requirements Plans. While all states have assigned risk plans, not all states have a FAIR Plan. A FAIR Plan insures fire, vandalism, riot and windstorm losses along with homeowners insurance that includes liability.

A FAIR Plan is actually an insurance pool that sells property insurance to people in a high risk situation. They also don’t have any control over that associated risk. As you might expect, plans vary by state. However, the one common denominator in all plans is that property insurers licensed in that state are required to participate in the FAIR Plan.