Kansas FAIR Plan

Overview

The Kansas All-Industry Placement Facility, commonly known as the Kansas FAIR Plan (Fair Access to Insurance Requirements), is a not-for-profit insurance association created by Kansas law to provide basic property insurance for responsible applicants who cannot obtain coverage through the voluntary insurance market.

Purpose and Authority

Legislative Authority

• Established under Kansas Statutes Chapter 40
• Administered by Kansas Insurance Department
• Operated by member insurance companies
• Serves as market of last resort

Mission

The Kansas FAIR Plan exists to:

• Provide basic property insurance to eligible applicants
• Ensure insurance availability throughout Kansas
• Protect property owners from going uninsured
• Stabilize insurance markets in high-risk areas

Eligibility Requirements

Primary Requirement: Market Rejection

To qualify for the Kansas FAIR Plan, applicants must demonstrate they have been unable to obtain insurance through the standard market:

Property Inspection

• Required before coverage approval
• Evaluates property condition and risk factors
• May identify required repairs or improvements
• Approval not guaranteed

Reasons for Standard Market Declination

Common reasons Kansas property owners may be declined in the voluntary market:

1. Location - Tornado-prone or high-risk areas
2. Claims History - Previous multiple claims
3. Property Condition - Age, maintenance issues
4. Construction Type - Non-standard building materials
5. Vacant Property - Extended vacancy
6. Unique Risks - Unusual exposures

Coverage Available

Types of Policies Offered

Covered Perils (Depending on Policy)

• Fire and lightning
• Windstorm and hail
• Explosion
• Smoke damage
• Vehicles and aircraft
• Vandalism and malicious mischief

Coverage Limitations

• Basic coverage only - Not as comprehensive as standard HO-3
• Named perils basis - Only listed perils covered
• May have coverage gaps compared to voluntary market policies
• Higher premiums than standard market

Important Policy Features

Valuation

• Generally written on Actual Cash Value (ACV) basis
• Depreciation applied to claim payments
• Replacement cost endorsements may be available

Deductibles

• Standard deductibles apply
• Percentage deductibles may apply for wind/hail
• Higher deductibles may reduce premiums

Premium Rates

• Rates reflect higher risk profile
• Generally higher than voluntary market
• Subject to Kansas Insurance Department approval

Funding and Operation

Member Company Participation

• All admitted Kansas property insurers must participate
• Participation is mandatory, not voluntary
• Market share determines contribution percentage
• Based on each company's written premium in Kansas

Administration

• Governed by board of directors
• Member insurers share in losses and expenses
• Reinsurance may be purchased
• Subject to Kansas Insurance Department oversight

Application Process

Steps to Apply

1. Contact Licensed Agent

   • Must apply through licensed Kansas agent
   • Agent submits application on behalf of applicant
   • Cannot apply directly to FAIR Plan

2. Gather Documentation

   • Written declinations from voluntary market
   • Property information and photos
   • Completed FAIR Plan application

3. Property Inspection

   • FAIR Plan arranges inspection
   • Identifies any required improvements
   • Determines insurability

4. Underwriting Review

   • Application reviewed for eligibility
   • Coverage and terms determined
   • Premium calculated

5. Policy Issuance

   • Coverage bound upon approval
   • Policy documents issued
   • Premium payment required

Exam Tip: Remember that the Kansas FAIR Plan requires applicants to first be declined by at least three voluntary market insurers. This is the "market of last resort" - not an alternative to standard insurance.