Wisconsin Insurance Plan (FAIR Plan)

Purpose and Creation

The Wisconsin Insurance Plan (WIP) was created by state statute to provide basic property insurance for properties that have been:

• Rejected for coverage by voluntary market insurers
• Cancelled by their current insurer
• Non-renewed and unable to find replacement coverage

FAIR Plan History

FAIR Plans (Fair Access to Insurance Requirements) were established under the Urban Property Insurance Protection and Reinsurance Act of 1968 to:

• Reduce unfair insurance practices
• Mitigate urban deterioration
• Ensure property insurance availability in underserved areas

Wisconsin Insurance Plan Coverage

Available Policy Types

Coverage Limits

• Dwelling coverage: Up to $350,000
• Liability coverage: Fixed at $100,000 (when included)
• Personal property: Available as endorsement
• Loss of use: Limited coverage available

Covered Perils

The Wisconsin Insurance Plan typically covers:

1. Fire
2. Lightning
3. Extended coverage perils (windstorm, hail, explosion, riot, aircraft, vehicle, smoke)
4. Vandalism and malicious mischief

Important Limitations

Eligibility Requirements

Property Requirements

• Property must be reasonably maintained
• No serious physical defects creating undue hazard
• Located in Wisconsin
• Applicant must demonstrate inability to obtain voluntary market coverage

Documentation Required

• Proof of rejection from voluntary market insurers
• Property information and photographs
• Prior claims history
• Current property condition

How the Plan Works

Shared Risk Mechanism

• All property insurers licensed in Wisconsin must participate
• Companies share in profits, losses, and expenses
• Participation proportional to market share in the state

Depopulation Efforts

Wisconsin encourages movement of risks back to voluntary market:

• Regular review of insured properties
• Outreach to private insurers
• Improved property conditions may qualify for regular market

Differences from Standard Policies

Exam Tip: The Wisconsin Insurance Plan is not required to insure all properties that apply. It has underwriting standards, though they may be less restrictive than private insurers. Properties must be reasonably maintained.

Wisconsin Insurance Plan Premiums and Assessments

Premium Structure

• Rates are filed with the OCI
• Generally higher than voluntary market
• Reflects higher risk nature of insured properties
• Subject to state regulatory approval

Assessments

When the Wisconsin Insurance Plan experiences a deficit:

• Participating insurers are assessed
• Assessment proportional to market share
• Passed through to policyholders in some cases

Applying for WIP Coverage

Application Process

1. Document rejection: Obtain evidence of voluntary market denial
2. Complete application: Provide detailed property information
3. Property inspection: WIP may require inspection
4. Underwriting review: Evaluation of eligibility
5. Policy issuance: If approved, coverage is bound

Required Information

• Property address and description
• Construction type and age
• Prior claims history
• Current insurance status
• Reason for voluntary market rejection

When to Use the Wisconsin Insurance Plan

Appropriate Situations

• Property in high-crime area
• Older home with outdated systems
• Prior claims history
• Vacant properties (limited coverage)
• Properties near environmental hazards

Not Appropriate For

• Properties that can obtain voluntary market coverage
• Properties with serious unrepaired damage
• Properties used for illegal purposes
• Properties that don't meet minimum standards

Exam Tip: All property insurers licensed in Wisconsin MUST participate in the Wisconsin Insurance Plan. This is a condition of doing business in the state.