Massachusetts may be faring better than other states in riding out turbulence in the home insurance industry, but its insurer of last resort is being forced to confront the affordability of its own coverage amid a reckoning across the state over the high cost of living.

Rising home insurance prices around the country and in New England, driven by increasing climate risk and higher rebuilding costs due to inflation and tariffs, are accelerating the FAIR Plan’s next critical juncture.

Already, the FAIR Plan’s premiums have gone up 11 percent between 2019 and 2023 even without a rate hike, and last year it increased the amount of coverage new policyholders are required to purchase.

Now, after the FAIR Plan saw its largest single-year jump in 2024 in new enrollees in two decades, the plan will need to decide this year whether it wants to raise the rates it charges — something that hasn’t happened in 20 years.

“This is the tension between getting everybody insurance and what that costs,” said Charlie Sidoti, a former insurance executive who now serves as executive director of the Cambridge-based nonprofit InnSure, which works with insurers and communities navigating climate risk. “Either way, people are screwed. If the premiums provide the coverage people need in case disaster strikes, but they can’t afford it, that causes strain. If the coverage is inadequate but affordable, there’s a protection gap that could really hurt people and whole communities during the next catastrophe event.”

Last year, the FAIR Plan, which provides home insurance for those unable to get it in the private market, launched a new requirement to raise the amount of coverage new policyholders must purchase. Those enrollees must now buy insurance that covers at least 90 percent of the reconstruction cost of their home, up from 80 percent.

Frank O’Brien, the FAIR Plan’s general counsel, said in an interview that most other private insurers now also require coverage of at least 90 percent of the reconstruction cost and “we didn’t want to be inconsistent with the marketplace.”

That reflects a growing tension: whether the insurer of last resort should continue to be both widely available and affordable amid rising prices and nonrenewals from private insurers. While being so accessible would help more people get needed coverage, it could also concentrate risk within the FAIR Plan among coastal properties, which are most vulnerable to severe damages from flooding, high winds, and other forms of extreme weather.

Such a scenario would disproportionately saddle the FAIR Plan with massive losses should a major storm hit Cape Cod and Plymouth and Bristol counties. Those areas now account for 55 percent of all FAIR Plan enrollees.

O’Brien said the decision to raise the amount of coverage new enrollees must purchase was essentially made with these tradeoffs in mind.

“We made that change because we were growing,” he said. “And one of the concerns is that when you have a large and growing residual market, which is what the FAIR Plan is, that’s a sign that the market is not as healthy as it should be. Our ability to do things that would slow growth down is pretty limited. One of the things that we looked at, however, was this requirement. It’s not a good thing when somebody’s under-insured — when something bad happens, they get the check and can’t go rebuild their house with it.”