Illinois Casualty Insurance State Practice Exam

Who is eligible to apply for coverage under the FAIR Plan?

1. Anyone seeking basic property insurance

2. Individuals who have been rejected by one insurance company

3. Persons rejected by at least three insurance companies

4. Homeowners regardless of past insurance history

The correct answer is: Persons rejected by at least three insurance companies

The FAIR Plan (Fair Access to Insurance Requirements Plans) is specifically designed to provide essential property insurance coverage for individuals who have difficulty obtaining insurance through the standard market. Eligibility for the FAIR Plan typically requires that applicants have been denied coverage by a certain number of insurance companies. The correct answer highlights that eligibility is extended to persons who have been rejected by at least three insurance companies. This requirement ensures that the FAIR Plan serves those who truly lack viable options for property coverage, effectively supporting homeowners and property owners in high-risk scenarios who may be unable to secure insurance through traditional methods. In contrast, the other choices do not accurately reflect the necessary criteria for eligibility. Anyone seeking basic property insurance may not face rejection by multiple insurers, nor do individuals simply rejected by one insurance company necessarily qualify for the FAIR Plan. Additionally, homeowners regardless of their past insurance history do not meet the specific conditions laid out for access to the program, which is focused on helping those who demonstrate a significant need for coverage due to multiple rejections.