One of the largest insurance providers for the Vineyard is making a policy change that could allow more Islanders to get coverage for their homes.

The Massachusetts Property Insurance Underwriting Association, which runs the FAIR plan for Bay Staters struggling to get insurance from other companies, is now allowing customers to get at least partial insurance with them for properties worth more than $1 million. 

Insurance experts said the change is a step in the right direction for Martha’s Vineyard, which has sky high premiums and one of the highest home insurance cancellation rates in the country.

For years, Island insurance agents have advocated for the underwriting association to raise its $1 million insurance cap because many Vineyarders had few options for home insurance at a time when average median home sale price is $1.6 million. 

The Vineyard has the third highest home insurance cancellation rate in the country. — Ray Ewing

While the policy change doesn’t totally remedy the issue, it is a step in the right direction, said Paula O’Connor, the executive vice president of Mone Insurance in Vineyard Haven. 

“It’s an olive branch,” she said. 

The FAIR plan was created by the state legislature in 1968 as an entity that offers insurance to consumers who have been declined coverage in the voluntary insurance market, though it doesn’t receive any state funding. 

Frank O’Brien, the general counsel for the underwriting association, said the policy change came after hearing concerns about the difficulties in obtaining insurance in Massachusetts with rising property values. 

“This is a mechanism that we are trying to utilize to respond to a need,” Mr. O’Brien said.

Effective April 15, consumers will be able to cover the first $1 million of a property, before then going to get a separate policy for the remaining amount, he said.

The idea was based on a program that has been in operation for a number of years in North Carolina. 

After getting coverage with the FAIR plan, consumers would then have 30 days to get additional insurance. If they were unable, the FAIR plan will still cover up $1 million, without a co-insurance penalty, Mr. O’Brien said. 

“What we are trying to do is create a structure where people have at least something,” he said. 

Despite the step forward, Ms. O’Connor saw some drawbacks to the new policy. She said that the FAIR plan requires any homes in a flood zone to obtain flood insurance, which could make it cost prohibitive for many Vineyard homes to use the FAIR plan despite the new allowance. 

“That’s going to hurt a client a lot financially,” she said. “[It’s a] good news, bad news situation.” 

The Vineyard market has seen marked premium increases for the last several years, partially due to the high cost of properties on the Island, the proximity to the water, and hits the insurance market has taken in other parts of the country. 

As the underwriting association’s policy goes into place, Richard Soo Hoo, the chief operating officer of Sterling Insurance in Vineyard Haven, said there have been indicators that insurance prices could ease up soon.

Mr. Soo Hoo said his agency had previously struggled in its search for a market that would provide coverage over the $1 million from the underwriting association. But by Wednesday, he had already heard form a broker partner that was putting together a new plan in light of the FAIR plan changes.

“It will be good to have for the next unfavorable cycle though and hopefully the corresponding excess policy will be available by then as well,” he said.