Question

Which one of the following is an insurance pool through which private insurers collectively address an unmet need for property insurance?

Select one:

a. Mutual insurance company

b. FAIR plans

c. Proprietary insurance

d. Reciprocal exchange

Answer 1

Correct answer is b.

FAIR plans (Fair Access to Insurance Requirements plan) is for those people who fail to get a property insurance from any standard insurer. It generally happens when the insurers consider these people as high risk which may be due to their proprerty falling in a high risk zone of natural calamities, etc. Such people are covered under a state-mandated plan called FAIR plan which enables them to get insurance on a shared-market basis. Under this, the risk is shared by more than one insurer.