The national guide covers the specialty and residual-market coverages: umbrellas, inland marine floaters, watercraft and recreational vehicles, flood insurance, and FAIR plans in general. Iowa's state questions here focus on the Iowa FAIR plan, created by Iowa Code chapter 515F, together with a few related cancellation and personal-lines rules.

National concepts in brief

• Flood is excluded from homeowners and dwelling forms. It is bought through the National Flood Insurance Program or a private flood insurer.
• Personal umbrella policies add liability limits above auto and homeowners coverage.
• FAIR plans make basic property insurance available to owners who can't get it in the voluntary market. They exist only in states that create them by law, and Iowa has one.

The Iowa FAIR plan (Iowa Code 515F.31–515F.39)

Purpose: to make basic property insurance available to qualified applicants with as little administrative detail and expense as possible (Iowa Code 515F.31).

Coverage (Iowa Code 515F.32(1)):

• Included: standard fire, extended coverage, vandalism and malicious mischief, and homeowners insurance.
• Not included: automobile insurance and inland marine insurance.

Pricing: prices should be actuarially self-supporting and should not compete actively with voluntary market prices (Iowa Code 515F.31(4)).

Membership: every insurer licensed to write property insurance in Iowa, and actually writing it, must subscribe to the plan as a condition of its authority (Iowa Code 515F.34).

Status: the plan is not a state agency. Its debts are its own, not the state's (Iowa Code 515F.35).

Governance: a seven-member governing committee. Five members come from named industry organizations, and two are elected by the other member insurers (Iowa Code 515F.36).

Notice: when a property policy is cancelled or nonrenewed, the notice must tell the insured they may be eligible for coverage through the FAIR plan (Iowa Code 515F.39).

Related personal-lines rules

• Personal insurance for Iowa's credit-scoring law means individually underwritten (Iowa Code 515.103(1)(j)):
  • private passenger auto and motorcycle;
  • homeowners, farm owners, personal farm liability and noncommercial dwelling fire;
  • mobile home, boat and watercraft, snowmobile and recreational vehicle policies.
• Personal lines cancellation and nonrenewal:
  • After 60 days in force, a personal lines policy can be cancelled only for listed reasons, such as nonpayment, fraud or a substantial increase in hazard (Iowa Code 515.129A).
  • Nonrenewal needs 60 days' written notice with specific reasons. A copy goes to the producer of record (Iowa Code 515.129B–515.129C).
  • If notice is late, the policy continues on the same terms.
• Cancellation notice: at least 30 days, or 10 days for nonpayment (Iowa Code 515.125).
• Umbrella policies may be cancelled for loss of the underlying coverage, with at least 10 days' notice by certified mail or delivery, stating the reason (Iowa Code 515.129).
• Coverage inquiries: an inquiry that doesn't result in a claim can't be used to surcharge, cancel or nonrenew personal lines coverage (Iowa Code 507B.4(3)(k)).
• Moving a policy to an affiliate is not a nonrenewal (Iowa Code 515.129B(3)).

Common exam traps

• Iowa does have a FAIR plan. It covers basic property and homeowners, but not auto or inland marine.
• Every property insurer writing in Iowa must subscribe to the plan.
• The plan is not a state agency, and the state doesn't owe its debts.
• Cancellation and nonrenewal notices must mention FAIR plan eligibility.
• Personal lines nonrenewal requires 60 days' notice with reasons.