The New Mexico FAIR Plan is the state's property insurer of last resort: when no standard insurer will cover a home, it can. But it covers less than a regular homeowners policy, pays depreciated value, and includes no liability. Here is exactly how the New Mexico FAIR Plan works in 2026, who qualifies, and how to move back to a standard policy.
The New Mexico FAIR Plan, in 60 seconds
The New Mexico FAIR Plan, officially the New Mexico Property Insurance Program, insures homes and businesses that standard insurers have declined. It covers named perils such as fire, wind and hail at actual cash value, up to $750,000 for most homes, but it excludes theft, water damage and liability. You need a regular-market declination to apply and again at every renewal.
- A backstop, not a first choice. The plan requires a declination from the regular market, confirmed by affidavit at application and renewal.
- Named perils only. Fire, lightning, wind, hail, smoke, explosion, vandalism and a few others.
- Big exclusions. No theft, water damage or liability coverage.
- Actual cash value. Claims pay depreciated value, not replacement cost.
- Higher limits since 2025. Up to $750,000 for homes in protection classes 1–7; $500,000 in classes 8–10.
The New Mexico FAIR Plan: key facts
| Official name | New Mexico Property Insurance Program | NMSA 59A-29 |
| Residential limit | $750K (classes 1–7) / $500K (8–10) | OSI Consumer Guide (Jan 2026) |
| Commercial limit | $2M per type, $5M per policy | OSI Consumer Guide |
| Coverage basis | Actual cash value, no liability | OSI Consumer Guide |
| Enrollment (2025) | ~7,200 residents and 280 businesses | NM OSI (July 2025) |
| Phone | (505) 878-9563 | NMPIP |
Most New Mexico homeowners never think about the FAIR Plan until they need it: a nonrenewal letter arrives, the regular market says no, and suddenly the state's insurer of last resort is the only door open. With a record number of New Mexico homes nonrenewed in 2025, more families are walking through it. The FAIR Plan can keep a home insured, but it is a different product from the policy you had. Our agents help New Mexico homeowners sort this out every month. This guide explains how it works, what it leaves out, and how to get back to a standard policy.
What Is the New Mexico FAIR Plan, and Who Runs It?
The short answer: It is the New Mexico Property Insurance Program, an association that every insurer selling property coverage in the state must join, created by law to insure property the regular market will not.
New Mexico's Fair Plan Act, NMSA 59A-29, requires licensed property insurers to maintain a plan and an underwriting association known as the New Mexico Property Insurance Program (NMPIP). Membership is a condition of an insurer's authority to sell property insurance in the state, and members share the plan's expenses, income and losses. Its rates and forms need the superintendent of insurance's prior approval under 13.13.3 NMAC.
The plan has grown with the state's wildfire problem. OSI reported about 7,200 residents and 280 businesses enrolled in 2025, and residual market policy counts doubled from 2019 to 2024. Meanwhile, more than 6,200 New Mexico homeowners were nonrenewed in 2025, according to state figures reported by Source NM.
Sources: NMSA 59A-29 → · 13.13.3 NMAC → · NM OSI (July 2025) → · OSI to a legislative committee (July 2025) → · Source NM (July 2026) →
Who Can Get a New Mexico FAIR Plan Policy?
The short answer: Owners of New Mexico property who have been declined in the regular market, whose property meets the plan's condition standards and is not vacant, farm or manufacturing property.
- A regular-market declination. Since November 4, 2025, an affidavit confirming it is required at application and again at every renewal.
- A New Mexico property and an insurable interest. Owner- and tenant-occupied homes, including mobile homes, are eligible.
- Not vacant. Property with no occupant or tenant for more than 60 days is not eligible.
- Not farming or manufacturing property. These are excluded by the plan's eligibility rules.
- Reasonable condition. Underwriters look at heating, wiring, roof, chimney, exterior, housekeeping and nearby brush. Hazards found at inspection must be fixed before a policy issues.
- No active wildfire nearby. No new business is written within 50 miles of an active fire until it is at least 90% contained.
One rule works in homeowners' favor: the plan's standards say no risk "shall be declined for neighborhood or area location." If you have been nonrenewed and are starting this process, our guide to handling a nonrenewal, step by step walks through the order.
Sources: OSI FAIR Plan Consumer Guide (Jan 2026) → · NMPIP eligibility → · NMPIP underwriting standards → · NMPIP FAQs →
What Does the New Mexico FAIR Plan Cover?
The short answer: A list of named perils, led by fire, wind and hail, at actual cash value; it does not cover theft, water damage, liability, ordinance or law, or earth movement.
| Covered perils | Not covered |
|---|---|
| Fire or lightning | Theft |
| Windstorm or hail | Water damage |
| Explosion (including internal explosion) | Liability |
| Smoke | Ordinance or law |
| Riot or civil commotion; aircraft; vehicles | Earth movement |
| Volcanic eruption; vandalism or malicious mischief | Replacement cost settlement |
Sources: NMPIP, covered perils → · NMPIP presentation to a legislative committee (July 2025) → · OSI Consumer Guide →
Dwelling policies use a basic deductible of $250, and non-dwelling property carries an 80% coinsurance requirement. The plan also writes contents coverage. The biggest difference from a standard homeowners policy is the settlement basis: the plan's rules say "no replacement cost insurance will be provided," so every claim pays actual cash value, meaning depreciated value. On an older home, that gap can be large after a total loss.
Sources: NMPIP, policy → · NMPIP, requirements →
How Much Coverage Can You Get From the New Mexico FAIR Plan?
The short answer: Up to $750,000 for a home in fire protection classes 1 through 7 and $500,000 in classes 8 through 10; commercial limits are $2 million per type and $5 million per policy.
| Property | Limit (2026) | History |
|---|---|---|
| Home, protection class 1–7 | $750,000 | Up to $350,000 before 2025; raised to $750,000 in 2025 |
| Home, protection class 8–10 | $500,000 | Set with the 2025 increase |
| Commercial | $2M per type, $5M per policy | Increase from $1M announced October 15, 2025 |
Sources: OSI Consumer Guide (Jan 2026) → · NM OSI (Mar 2025) → · NM OSI (Oct 2025) →
Your fire protection class depends on the fire department that serves your address and the distance to a station and hydrant, which is why rural homes can face the lower cap. Ask your agent which class applies to your home before you set a limit.
How Are New Mexico FAIR Plan Rates Set?
The short answer: The plan files its rates for the superintendent of insurance's prior approval, and its governing committee can adopt less than an actuarial study indicates.
All plan rates are subject to the superintendent's prior approval. In its most recent reported action, the plan's actuaries indicated a 20% increase and the governing committee adopted 9.7%, according to OSI's July 2025 presentation to lawmakers. The plan has also relied on assessments of member insurers after hail and wildfire losses: OSI reported 2023–2024 member assessments that included $2.5 million for hail claims and an $8 million assessment after wildfire losses. Premium must be received before coverage applies; agents cannot bind a FAIR Plan policy, and coverage begins after underwriting approves the application, photos and first payment.
Sources: NMPIP, rating → · OSI to a legislative committee (July 2025) → · NMPIP, producers →
Wyatt Mace
Wyatt is a lifelong Farmington resident who founded The Mace Agencies in 2018. His team of nearly twenty carries roughly 18,000 policies in force from offices in Farmington and Albuquerque, licensed in New Mexico, Colorado, Arizona, Utah and Texas.
How Do You Apply for the New Mexico FAIR Plan?
The short answer: Through a licensed insurance agent, who submits the application, the declination affidavit and photos to the plan.
The OSI Consumer Guide says new business must be submitted by a licensed producer, and the plan's own FAQ says you can contact it directly if an agent cannot help. Expect to provide photos of the property and to e-sign the declination affidavit; the FAQ warns that a policy can be canceled if the affidavit is not signed. Start early. An application within 50 miles of an active wildfire will not be accepted; it can be resubmitted once the fire is at least 90% contained.
Before you apply, ask whether a standard insurer would take the home after repairs or mitigation. A declination from one company is not a declination from every company, and our statewide guide explains what a standard New Mexico homeowners policy includes that the FAIR Plan does not. Our home insurance page explains how we review a declined home.
Sources: OSI Consumer Guide → · NMPIP FAQs → · NM OSI, homeowners →
What Gaps Does the New Mexico FAIR Plan Leave, and How Do You Handle Them?
The short answer: No liability, no theft or water coverage, and depreciated claim payments; plan for each one with your agent instead of assuming the FAIR Plan works like your old policy.
- Liability. If someone is hurt on your property, the FAIR Plan pays nothing, and liability cannot be added. Ask your agent how to cover it.
- Theft and water damage. Both are excluded. A burst pipe or a break-in falls on you.
- Depreciation. Actual cash value means an older roof or home pays well below the cost to rebuild. Set limits with that in mind.
- Your mortgage lender. Tell your lender about the change and send the new declarations page promptly.
Your auto policy is separate and can stay where it is; our guide to bundling home and auto in New Mexico explains what changes when the home moves to the FAIR Plan.
How Do You Get Off the New Mexico FAIR Plan?
The short answer: By qualifying for a standard policy again, usually after mitigation or repairs; the plan itself says "if you can obtain coverage in a standard market, that is where you should go."
We found no New Mexico program that automatically moves policies back to the regular market, so leaving is up to you and your agent. The renewal affidavit means the question comes up every year anyway. The most useful steps are the ones insurers reward:
- Mitigate wildfire risk. Fire-resistant roofing, a noncombustible zone around the house and trimmed trees. The IBHS Wildfire Prepared Home program is available in New Mexico, and OSI lists a promo code, NMGRANT, that may lower the application fee.
- Fix what the inspection flagged. Roof, wiring and heating updates help with both the FAIR Plan and the regular market.
- Check at every renewal. Ask your agent to test the regular market before you sign the next affidavit.
In 2025 the Legislature funded a $10 million grant program paying about $7,000 per home toward roofs built to IBHS standards for FAIR Plan policyholders in high wildfire-risk areas. Its funding was set to expire June 30, 2026, and the superintendent asked lawmakers to extend it, so check with OSI whether new grants are open. For roof-specific questions, see our guide to home insurance with an older roof.
Sources: NMPIP FAQs → · NM OSI, homeowners (July 2026) → · Wildfire Prepared Home → · Source NM (Nov 2025) →
Can You Appeal a New Mexico FAIR Plan Decision?
The short answer: Yes: the plan must give reasons for a decline, and you can appeal a plan decision to the superintendent of insurance within 30 days.
If the plan declines an application, its operating procedures require it to state the reasons and suggest improvements within 10 business days. Under NMSA 59A-29-6, anyone aggrieved by a plan decision can appeal to the superintendent within 30 days. For other problems, OSI's Consumer Assistance Bureau takes complaints at 855-427-5674. You can reach the plan itself at (505) 878-9563, 7601 Jefferson St NE, Suite 380, Albuquerque.
Sources: NMPIP operating procedures → · NMSA 59A-29-6 → · NM OSI →
Frequently Asked Questions About the New Mexico FAIR Plan
What does the New Mexico FAIR Plan cover?
The New Mexico FAIR Plan, officially the New Mexico Property Insurance Program, covers named perils: fire or lightning, internal explosion, windstorm or hail, explosion, riot or civil commotion, aircraft, vehicles, smoke, volcanic eruption, and vandalism or malicious mischief. It can cover the dwelling and contents. Claims are paid at actual cash value, meaning depreciated value, because the plan does not offer replacement cost. It does not cover theft, water damage, liability, ordinance or law, or earth movement, so it is narrower than a standard homeowners policy.
Who is eligible for the New Mexico FAIR Plan?
Owners of New Mexico property who have been declined in the regular insurance market can apply. Since November 4, 2025, an affidavit confirming that declination is required at application and again at each renewal. The property must meet the plan's condition standards, and hazards found at inspection must be fixed first. Vacant property, meaning no occupant or tenant for more than 60 days, is not eligible, and farming and manufacturing properties are excluded. Mobile homes can qualify. No new business is written within 50 miles of an active wildfire until it is at least 90% contained.
What are the New Mexico FAIR Plan coverage limits?
As of 2026, the plan insures homes up to $750,000 in fire protection classes 1 through 7 and up to $500,000 in classes 8 through 10, according to the OSI Consumer Guide updated in January 2026. The residential limit was up to $350,000 before it rose to $750,000 in 2025. Commercial property can be insured up to $2 million per type and $5 million per policy, after an increase announced in October 2025. Because claims pay actual cash value, the amount you would collect after a loss can be lower than these limits suggest.
Does the New Mexico FAIR Plan include liability coverage?
No. The New Mexico FAIR Plan does not include premises liability, and liability cannot be added to a plan policy. That means if someone is injured on your property, the FAIR Plan will not pay for their injuries or your legal defense. The plan also excludes theft and water damage. If your home is insured through the FAIR Plan, talk with a licensed agent about how to handle liability separately, and revisit the regular market at each renewal, especially after completing mitigation work or repairs the inspection identified.
Can you appeal a New Mexico FAIR Plan decision?
Yes. If the plan declines an application, its operating procedures require it to give the reasons and suggest improvements within 10 business days. Under NMSA 59A-29-6, a person aggrieved by a decision of the plan may appeal to the superintendent of insurance within 30 days. For other concerns about the plan or an insurer, the Office of Superintendent of Insurance Consumer Assistance Bureau takes complaints at 855-427-5674. Keep copies of the decline letter, your application and any inspection report.
Related Questions
The Bottom Line on the New Mexico FAIR Plan
The short answer: The New Mexico FAIR Plan keeps a declined home insured, but it pays actual cash value and leaves out theft, water and liability, so treat it as a bridge back to a standard policy.
The FAIR Plan is a real safety net, and its limits are higher than they have ever been. But it is not a homeowners policy. The families who come through it best use it as a bridge: they fill the gaps with their agent, do the mitigation work insurers reward, and test the regular market at every renewal.
Facing a declination or nonrenewal? Start a free quote or call (505) 576-8347, and we will tell you plainly what we can do.
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Start my free quote →About this guide. Written and reviewed by The Mace Agencies team, licensed insurance professionals serving roughly 18,000 policies from Farmington and Albuquerque, and licensed in New Mexico, Colorado, Arizona, Utah and Texas. This guide is educational, not legal advice or a quote. Facts come from the named sources linked above, including NMSA 1978, the New Mexico Administrative Code, the Office of Superintendent of Insurance, the New Mexico Property Insurance Program, legislative committee presentations, IBHS and state reporting by Source NM.
Last reviewed by The Mace Agencies team on September 25, 2026.