The Massachusetts Property Insurance Underwriting Association, commonly known as the FAIR Plan, has announced a significant policy change that will allow homeowners on Martha’s Vineyard to fully insure homes valued at over $1 million. The FAIR Plan is the most common insurance provider on the Island, serving 36.6% of local homeowners.
New Policy Details
According to the new policy, homeowners using the FAIR Plan will be able to supplement their coverage with an excess and surplus market policy without facing co-insurance penalties. This development comes as many Island residents are grappling with rising insurance costs, with some expressing concerns about being priced out of their homes.
Previously, the FAIR Plan capped coverage at $1 million. The new policy allows homeowners to purchase additional coverage for rebuilding costs exceeding this amount through a separate policy. While the FAIR Plan will support homeowners in pursuing this extra coverage, it will not assist with the process.
Industry Reaction
Joe Gervais, owner of Tashmoo Insurance in Vineyard Haven, believes that while this change won’t drastically alter the local insurance market, it is a step in the right direction. “We’re all happy to have more people who want to write home insurance on Martha’s Vineyard. This will make the market more competitive,” Gervais said.
Frank O’Brien, general counsel for the FAIR Plan, explained that the new policy is part of the organization’s effort to provide better coverage for Massachusetts homeowners. The concept is based on the North Carolina Beach Plan, which covers beach risks and has worked effectively.
Implementation Timeline
While the policy change is seen as positive, its effects will take time to materialize. Gervais noted that the surplus-lines market has not yet been developed and will take a couple of weeks to become available. “We’ll have to wait a couple weeks until it’s available. They’ll see how this works and we’ll revisit this,” he said.
The new policy aims to provide additional protections for homeowners relying on the FAIR Plan, although it won’t address the rising cost of insurance. As the local insurance market adapts to this change, homeowners will have the opportunity to enhance their coverage for high-value homes.
