Is the Texas FAIR Plan bad insurance?

It is thin insurance with a specific job: keeping you from being fully uninsured when the standard market declines you. Named perils only, actual cash value payout, and no liability coverage. As a bridge it works. As a permanent plan for an occupied rental, the liability gap alone should push you back to the standard market as soon as you can qualify.

How many Tarrant County properties are on the FAIR Plan?

About 3,800 as of the Texas Department of Insurance FAIR Plan data for Q1 2026, roughly $1.2 billion in total exposure. That ranks Tarrant 8th among Texas counties. Statewide enrollment roughly doubled between the end of 2022 (61,000 policies) and the end of 2025 (128,000).

Does the FAIR Plan cover my tenant getting hurt at the property?

No. The FAIR Plan includes zero liability coverage. If a tenant or guest is injured at the property, a FAIR-only owner is personally exposed. Landlords on the FAIR Plan should carry a separate liability or umbrella policy; ask your insurance agent which structure fits your situation.

Can I sell a house that is insured through the FAIR Plan?

Yes, but as of July 1, 2026 the Texas seller's disclosure asks whether you were unable to obtain standard-market coverage. Buyers and their agents will see it. If the reason you landed on FAIR is fixable, like a roof at the end of its life, fixing it before listing usually beats disclosing it.

How do I get off the FAIR Plan?

Fix the reason you were declined, then re-shop the standard market. Texas requires FAIR policyholders to attempt the standard market every two years anyway. An independent insurance agent who writes multiple carriers can tell you which carriers are currently writing in your ZIP and what they are declining for.

Tarrant County · Owner Guide

What Does the Texas FAIR Plan Mean for a Tarrant County Landlord?

By Andrew ChavisUpdated September 6, 20264 min read

The Short Answer

The Texas FAIR Plan is the state's property insurance of last resort, for owners the standard market turned down. About 3,800 Tarrant County properties are on it, roughly $1.2 billion in exposure, the 8th most of any Texas county (TDI FAIR Plan data, Q1 2026). If one of them is your rental, three things matter: it covers named perils only, it pays depreciated actual cash value instead of replacement cost, and it includes zero liability coverage. An occupied rental with no attached liability protection is a quiet exposure that surfaces at the worst possible time.

What the FAIR Plan Is and Who Ends Up on It

FAIR stands for Fair Access to Insurance Requirements. It exists for owners who tried the standard market and got declined, usually for roof age, claims history, property condition, or simply being in a risk pocket carriers are pruning. It is not a discount plan and it is not meant to be permanent. Texas requires FAIR Plan policyholders to re-shop the standard market every two years, and you should want to anyway. Statewide enrollment doubled in three years: about 61,000 policies at the end of 2022 to roughly 128,000 by the end of 2025 (TDI). That growth is the insurance market hardening in real time.

The Three Gaps That Matter for a Rental

First, named perils only: the policy covers the specific causes of loss it lists, and nothing else. Standard policies work the opposite way. Second, actual cash value: a 12-year-old roof pays out as a 12-year-old roof, depreciated, not what it costs to replace. On a claim that difference is your money. Third, and the one most landlords miss: the FAIR Plan includes no liability coverage at all. A tenant slip, a dog bite, a guest injury on the property, none of it is covered by the FAIR policy. An occupied rental generating income with zero liability protection is not a technicality. It is the whole ballgame if something goes wrong.

What Changed on July 1, 2026

As of July 1, the Texas seller's disclosure now asks whether the owner was unable to obtain standard-market insurance for the property. Insurability is now an asset attribute that follows the house into a sale. A property that can only get FAIR coverage tells every future buyer something, in writing. For owners deciding whether to sell or keep renting, that disclosure line changes the math: fixing the reason you got declined (usually the roof) may add more value than it costs, and staying on FAIR quietly marks the asset.

If Your Rental Is on the FAIR Plan: The Checklist

One: add liability protection now. A separate landlord liability policy or an umbrella policy fills the gap the FAIR Plan leaves open; talk to your insurance agent about which fits. Two: find out why you were declined and price the fix. Most declines trace to roof age or condition, and a roof replacement re-opens the standard market where coverage is broader and often cheaper. Three: calendar the two-year re-shop requirement and treat it as a floor, not a ceiling; re-shop annually. Four: if you are weighing selling, remember the July 1 disclosure. Handle the insurability problem before you list, not in the middle of a negotiation.

Why a Property Manager Cares About Your Insurance

We manage 70+ doors across Tarrant and Parker County, and insurability comes up in almost every owner conversation now. Our management agreement requires owners to carry liability coverage naming the broker as additional insured, which means a FAIR-only owner has a compliance gap on day one. That requirement is not paperwork for its own sake. It protects the owner, the tenant relationship, and the asset. If you are not sure what your current policy actually covers, that is a fifteen-minute call with your insurance agent that is worth more than most hours you will spend on the property this year.

Common Questions

Is the Texas FAIR Plan bad insurance?: It is thin insurance with a specific job: keeping you from being fully uninsured when the standard market declines you. Named perils only, actual cash value payout, and no liability coverage. As a bridge it works. As a permanent plan for an occupied rental, the liability gap alone should push you back to the standard market as soon as you can qualify.
How many Tarrant County properties are on the FAIR Plan?: About 3,800 as of the Texas Department of Insurance FAIR Plan data for Q1 2026, roughly $1.2 billion in total exposure. That ranks Tarrant 8th among Texas counties. Statewide enrollment roughly doubled between the end of 2022 (61,000 policies) and the end of 2025 (128,000).
Does the FAIR Plan cover my tenant getting hurt at the property?: No. The FAIR Plan includes zero liability coverage. If a tenant or guest is injured at the property, a FAIR-only owner is personally exposed. Landlords on the FAIR Plan should carry a separate liability or umbrella policy; ask your insurance agent which structure fits your situation.
Can I sell a house that is insured through the FAIR Plan?: Yes, but as of July 1, 2026 the Texas seller's disclosure asks whether you were unable to obtain standard-market coverage. Buyers and their agents will see it. If the reason you landed on FAIR is fixable, like a roof at the end of its life, fixing it before listing usually beats disclosing it.
How do I get off the FAIR Plan?: Fix the reason you were declined, then re-shop the standard market. Texas requires FAIR policyholders to attempt the standard market every two years anyway. An independent insurance agent who writes multiple carriers can tell you which carriers are currently writing in your ZIP and what they are declining for.