Which statement about government insurance programs is true?

Which statement about government insurance programs is true?

• A. FAIR plans insure only commercial properties
• B. FAIR plans make basic property insurance available to property owners who can't get it otherwise
• C. FAIR plans require all property owners to purchase flood insurance
• D. FAIR plans regulate private insurers

Answer: (B)

FAIR plans exist to ensure access to basic property insurance for property owners who can’t obtain coverage through ordinary markets. They’re state-created pools that step in when private insurers withdraw or refuse high-risk properties, providing a basic level of property coverage that might not be available otherwise. Coverage through FAIR plans is intentionally limited and often has higher deductibles or exclusions, reflecting their role as a backstop rather than a full private-market policy. That’s why the statement about making basic property insurance available to those who can’t get it otherwise is true. The other options aren’t accurate: FAIR plans don’t insure only commercial properties (they cover both residential and commercial in many cases); flood insurance is a separate program (NFIP) and isn’t a requirement of FAIR plans; and FAIR plans don’t regulate private insurers—the state insurance department oversees them as part of the broader regulatory framework.

FAIR plans exist to ensure access to basic property insurance for property owners who can’t obtain coverage through ordinary markets. They’re state-created pools that step in when private insurers withdraw or refuse high-risk properties, providing a basic level of property coverage that might not be available otherwise. Coverage through FAIR plans is intentionally limited and often has higher deductibles or exclusions, reflecting their role as a backstop rather than a full private-market policy.

That’s why the statement about making basic property insurance available to those who can’t get it otherwise is true. The other options aren’t accurate: FAIR plans don’t insure only commercial properties (they cover both residential and commercial in many cases); flood insurance is a separate program (NFIP) and isn’t a requirement of FAIR plans; and FAIR plans don’t regulate private insurers—the state insurance department oversees them as part of the broader regulatory framework.