Tennessee Has No FAIR Plan: Surplus Lines Homeowners Coverage Requires Three Declinations

By James Brazil

James Brazil lives in Mérida, Mexico. He founded Swift Agent Sites and studied Classics at the University of Mississippi.

Published 12 November 2026 · Updated 12 November 2026

Insurance: P&C

Tennessee does not operate a FAIR Plan or other state residual property market for homes that admitted insurers will not write. When those companies decline a homeowners risk, surplus lines placement for standard residential coverage requires three documented declinations from the admitted market.

That rule comes from the Tennessee Department of Commerce and Insurance (TDCI) surplus lines declination-requirement page, and it is the path of last resort for many property owners who cannot find a policy in the admitted market.

What the absence of a FAIR Plan means

Some states run a Fair Access to Insurance Requirements plan that sells basic property coverage when the regular market will not. Tennessee does not. If several standard companies decline to insure a house, a mobile home, or a dwelling policy, there is no state-run residual plan to fall back on. The alternative TDCI describes is a surplus lines policy, placed by a licensed surplus lines agent after the required number of declinations from admitted insurers.

Surplus lines companies are not the same as the admitted companies that file rates and forms in the ordinary market. They can insure risks the admitted market has turned down, but the placement has to follow Tennessee's declination rules, and the consumer protections are not identical to those on an admitted policy. Ask the agent, in writing, whether the company is a surplus lines insurer, whether a guaranty-fund or similar backstop would apply if the company failed, and what the policy deductibles and exclusions are.

TDCI's declination table is specific. For residential homeowners forms HO-1 through HO-8, and for dwelling and mobile-home coverage in that same personal-lines grouping, the Department requires three declinations. Personal flood coverage requires one declination. Those counts are not a casual shopping target. They are the documented refusals the surplus lines agent needs before the risk can be placed.

A declination is a refusal to write the coverage, not a high quote you chose not to buy. Keep the written or emailed refusals, the company names, the dates, and a short note of the reason given, if any. If an agent makes the market search for you, ask for a copy of the declination record that will be used for the surplus lines file. If you cannot get three admitted-market refusals for a standard homeowners form, the surplus lines path for that coverage is not open yet. Keep trying other admitted companies, or ask whether a change in deductible, coverage amount, or repairs would make the risk acceptable in the standard market.

What to compare before you buy a last-resort policy

A surplus lines homeowners or dwelling policy can be the difference between having property coverage and going bare, but it is still a contract you have to read. Before you bind coverage, ask the licensed agent to put the following in writing:

• The insurer's name and surplus lines status, and the name of the Tennessee surplus lines agent making the placement.
• The coverage form (for example, an HO-3 equivalent or a dwelling fire form) and whether liability, theft, and ordinance-or-law coverage are included or excluded.
• The deductible, including any percentage deductible for wind, hail, or other perils.
• The actual cash value or replacement-cost basis for the dwelling and for personal property.
• The number and source of the required declinations.
• The premium, taxes, and fees, and how long the quote is valid.

Flood remains a separate question. A homeowners policy, including a surplus lines homeowners policy, typically still excludes flood. Personal flood may be available in the surplus lines market after one declination, and NFIP coverage may be available if the community participates in the National Flood Insurance Program. Do not assume a hard-to-place homeowners policy has solved a flood or earthquake exposure.

If you were nonrenewed or cancelled, ask the admitted company for the reason and the date the coverage ends. Shop before that date so you are not uninsured between policies. If you believe a cancellation or claim denial broke Tennessee insurance law, you can file a complaint with TDCI Consumer Insurance Services. A complaint does not create a residual market, but it can address a practice that is not allowed.

For many owners, prevention and documentation help the next underwriter say yes: a current roof age, a photo of repairs, a claims-free letter, and a decision to raise a deductible or lower a coverage amount. Those steps do not guarantee an admitted policy, but they are often what a standard company asks to see after a prior decline.

FAQ

Does Tennessee have a FAIR Plan?

No. TDCI does not operate a FAIR Plan or other state residual property market. The documented last-resort path for many personal property risks is surplus lines coverage after the required declinations.

How many declinations are required for a surplus lines homeowners policy?

TDCI requires three declinations for residential homeowners forms HO-1 through HO-8, and for dwelling and mobile-home coverage in that grouping. Personal flood requires one declination.

Is a surplus lines policy the same as a standard admitted policy?

No. It is coverage placed outside the ordinary admitted market after the required search. Ask the agent about the form, deductibles, exclusions, and any difference in consumer protections.

Does a surplus lines homeowners policy cover flood?

Do not assume that it does. Flood is typically a separate policy. Personal flood may be placed in surplus lines after one declination, and NFIP coverage may be available in participating communities.

Next step

If admitted insurers have declined your home, ask a licensed local surplus lines agent to document the required declinations and to compare a surplus lines quote, in writing, against any remaining admitted-market option, including deductibles, exclusions, and flood coverage sold separately.

Sources: Tennessee Department of Commerce and Insurance, Surplus Lines Declination Requirement; Tennessee Department of Commerce and Insurance, File a Complaint.

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