Ohio's insurer of last resort just added condominium association language
Ohio's insurer of last resort just added condominium association language
2026-09-15 · Ohio · Compliance
The Ohio FAIR Plan Underwriting Association — the state's insurer of last resort — rewrote its commercial property programme effective April 1, 2026, and one of the changes it flagged to agents was the addition of language specific to condominium associations.1
Bulletin #34, issued February 10, 2026, announced the switch:
“Effective 4/1/2026, new and replacement Commercial business will be written using the Commercial Property program of American Association of Insurance Services (AAIS). With this change comes new rates and coverage forms.”
The bulletin lists what agents should notice:
“There are many differences, but these changes may have significance to customers: • Adds coverage for debris removal • Clarifies that an appraiser cannot interpret policy language • Adds language specific to condominium associations • Co-insurance requirements are being discontinued • Commercial Rehabilitation policies are being discontinued”
The line that tells you the market is healthy
The same bulletin closes with an instruction that reads oddly for an insurer of last resort:
“As you do each year at the offer of replacement coverage, please take this opportunity to check your customer's eligibility in the standard market – the customer may not need to be insured with OFP any longer.”
A distressed residual market does not tell agents to move business back out. The Association's own materials put the scale of its role plainly: “More than 98% of all property owners in Ohio are able to purchase coverage through a standard company.”
What the FAIR Plan writes, and what it will not
The Plan is created by R.C. 3929.43, amended by Senate Bill 175 effective October 24, 2024, and consists of “all insurers authorized to write within this state, on a direct basis, basic property insurance” — membership is compulsory: “Every such insurer shall be a member of the association and shall remain a member as a condition of its authority to write any of such insurance in this state.” Rates “shall be subject to the approval of the superintendent.”
Under the plan of operation at OAC 3901-1-18, rewritten effective April 1, 2025, anyone “who has been unable to obtain basic property insurance or homeowners' insurance, may apply for coverage to the association,” on a condition that “at least two insurance companies authorized to do business in Ohio have declined to grant the coverage requested.” The ceiling is “two million dollars” per location.
For unit owners the Plan writes the HO 00 06 unit-owners form, with conditions including that “[p]roperty must be the owner's primary residence,” “[p]roperty must be a condominium,” and that it “may not be insured for more than the replacement cost of the insured's ownership in the condominium unit.”
The residual market is a floor, not a substitute. Our Ohio insurance requirements page covers the coverage a board is expected to maintain.
The eligibility condition that reaches boards
The FAIR Plan's agent guide lists the underwriting conditions, and one of them is an association problem in disguise:
“There may not be any delinquent taxes, assessments, penalties or other such charges upon the property to be insured.”
A delinquent assessment recorded against a unit can disqualify that unit from the state's insurer of last resort. For an owner who has already been refused by two carriers — which is the precondition for applying at all — that is the end of the road. They cannot insure the unit, which means they cannot satisfy their mortgage, which means force-placed coverage and, in the worst sequence, a foreclosure that ends with the association holding an unsellable unit and unpaid assessments.
Boards running an aggressive lien-and-charge policy against an owner in financial difficulty should understand that the recorded charges themselves can foreclose the owner's last insurance option. Our Ohio collections and liens page covers the timing choices available in that situation.
Other conditions in the same guide: “Property must have been denied coverage by at least two insurance companies”; “The property must be at least 50% occupied and secure from trespass”; and the property “may not be in violation of any building, housing, air pollution, sanitation, health, fire or safety code or ordinance or rule” — which puts an open municipal violation on a common element in the way of a unit owner's application.
What the coverage actually is
The Plan is a floor, not a substitute. Its agent guide is blunt about the limits: “All contents coverage is offered at Actual Cash Value. No liability is available for landlords. Scheduling of personal property is not offered. Backup of Sewer and Drains is not available. Replacement cost on the dwelling is only offered on a Homeowners policy.”
On the HO-6, limits run from a $5,000 dwelling minimum and $10,000 personal property minimum, with personal liability at $100,000 or $300,000 and medical payments capped at $1,000.
Set that against what lenders now require. Fannie Mae requires a unit owner's policy wherever the master policy carries a per-unit deductible, at least equal to that deductible — and the per-unit deductible cap is $50,000. A FAIR Plan HO-6 at minimum limits does not satisfy that. An owner in the residual market may be insurable and still unfinanceable.
Two things to take from this
The condominium language is a signal, not a warning. The Plan adding association-specific provisions to its commercial forms means associations are showing up in the residual market often enough to be worth drafting for. That is worth knowing alongside the fact that Ohio's personal-lines market is softening — both are true, and they describe different markets.
Coinsurance is going away on FAIR Plan commercial business, and that is genuinely favourable. A coinsurance clause penalises an association that has underinsured relative to replacement cost, which in a period of sharp construction-cost inflation catches boards who have not refreshed their valuation. Its discontinuation on this programme removes one trap. It does not remove it anywhere else — on a flood policy, the RCBAP's 80 percent coinsurance test is untouched and still bites.
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