What is the purpose of the Fair Plan?

The Fair Plan serves the specific purpose of providing fire and extended coverage insurance to properties that might otherwise be unable to secure insurance due to their high-risk nature. It was established to offer a safety net for homeowners in areas prone to hazards, thereby ensuring that individuals have the means to insure their homes against fire-related damages. This program is particularly important in regions where traditional insurance markets may be unwilling to issue policies due to the perceived risks involved.

The other options do not accurately reflect the main objective of the Fair Plan. For example, while it does focus on fire coverage, it does not eradicate risks related to floods or other perils, which is not the role of this particular insurance mechanism. Additionally, it does not aim to restrict access based on risk; rather, it seeks to provide insurance solutions to high-risk policyholders. Lastly, while it relates to fire insurance, it does not define its limits, but rather provides coverage where it may not typically be available.