New Mexico's Office of the Superintendent of Insurance (OSI) has raised the commercial property coverage limit under the state's FAIR Plan to $2 million, doubling the previous cap of $1 million.
The move aims to improve access to coverage for businesses struggling to secure or renew policies amid rising wildfire risk and higher rebuilding costs, according to a report from BestWire.
The FAIR (Fair Access to Insurance Requirements) Plan serves as a market of last resort for property owners who are unable to obtain coverage in the private market.
Superintendent Alice Kane (pictured) said the higher limits will help address growing coverage gaps, particularly in wildfire-impacted communities. The increase follows a July decision to make permanent a temporary boost in residential FAIR Plan limits to $750,000 from $350,000, signaling a broader effort to modernize the state’s insurance safety net.
According to Kane, the higher commercial coverage will benefit the more than 280 businesses and 7,200 residents currently enrolled in the FAIR Plan, while supporting future enrollees facing market disruptions. She said the decision represents “another positive step forward” in improving insurance accessibility and resilience.
The change also aligns with Senate Bill 81, which sought to raise FAIR Plan limits for both personal and commercial policies earlier this year. While the bill passed the Senate in March, it remains stalled in the House Judiciary Committee. Supporters of the legislation, including Senate Majority Leader Peter Wirth, argued that increasing coverage limits is essential to reflect current property values and construction costs.
Industry trade groups, however, have cautioned that expanding the FAIR Plan could discourage private insurers from returning to the market, potentially increasing the state’s exposure to underwriting losses.
According to BestLink data, the top commercial multiple peril insurers in New Mexico in 2024 were Travelers Group (13.65%), Farmers Insurance Group (6.65%), Liberty Mutual Insurance Cos. (6.17%), State Farm Group (5.63%), and Tokio Marine US PC Group (5.20%).
The FAIR Plan’s expansion underscores the balancing act regulators face between ensuring insurance availability and maintaining market stability. As wildfire threats intensify across the Southwest, New Mexico’s move places it among several states - including California and Colorado - where FAIR Plans are playing a growing role in sustaining commercial and residential coverage capacity.
