<Page>
Exhibit 5.3
June 27, 2003
Fund American Trusts I-III
c/o Fund American Companies, Inc.
One Beacon Street
Boston, Massachusetts 02108-3100
Re: Fund American Trusts I, Fund American Trust II and Fund American
Trust III
Ladies and Gentlemen:
We have acted as special Delaware counsel for Fund American Companies,
Inc., a Delaware corporation (the "Company"), and Fund American Trusts I, Fund
American Trust II and Fund American Trust III, each a Delaware statutory trust
(each, a "Trust" and collectively, the "Trusts"), in connection with the matters
set forth herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Declaration of Trust of each Trust, each dated as of October 30,
2001, among the Company and the trustees of the Trust named therein;
(b) The Amended and Restated Declaration of Trust of each Trust, each
dated as June 26, 2003, among the Company and the trustees of the
Trust named therein;
(c) A form of Amended and Restated Declaration of Trust for each Trust
(including Exhibits A, B and C thereto) (collectively, the "Trust
Agreements")in the forms referenced as exhibits 4.13, 4.14 and 4.15
to the Registration Statement (as defined below), to be entered into
by and among the Company, as depositor, the trustees of the Trust
named therein,
<Page>
Fund American Trusts I-III
June 27, 2003
Page 2
and the holders, from time to time, of the undivided beneficial
interests in the assets of such Trust;
(d) The Registration Statement on Form S-3 (Registration No. 333-88352),
as amended by Amendment No.4 thereto, including a preliminary
prospectus with respect to each Trust (the "Prospectus"), to be
filed on or about June 26, 2003 (as amended, the "Registration
Statement") by the Trusts, the Company and others with the
Securities and Exchange Commission (the "Commission"), relating to
the preferred securities of each Trust, representing undivided
beneficial interests in the assets of each Trust (each, a Preferred
Security" and collectively, the "Preferred Securities");
(e) A certified copy of the Certificate of Trust for each Trust, each
dated October 30, 2001, as filed with the Office of the Secretary of
State of Delaware (the "Secretary of State") on October 30, 2001,
each as corrected by the Corrected Certificate of Trust for each
Trust, as filed with the Office of the Secretary of State on
November 2, 2001 (each as so corrected, a "Certificate of Trust;"
and collectively, the "Certificates of Trust"); and
(f) A Certificate of Good Standing for each Trust, each dated June 26,
2003, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreements.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (f) above. In particular, we
have not reviewed any document (other than the documents listed in paragraphs
(a) through (f) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that bears upon or is inconsistent with
the opinions stated herein. We have conducted no independent factual
investigation of our own but rather have relied solely upon the foregoing
documents, the statements and information set forth therein and the additional
matters recited or assumed herein, all of which we have assumed to be true,
complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that each Trust
Agreement will constitute the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of each Trust, that the
<Page>
Fund American Trusts I-III
June 27, 2003
Page 3
Certificates of Trust are in full force and effect and have not been further
amended and that the Trust Agreements will be in full force and effect and will
be executed in substantially the forms reviewed by us, (ii) except to the extent
provided in paragraph 1 below, the due creation or due organization or due
formation, as the case may be, and valid existence in good standing of each
party to the documents examined by us under the laws of the jurisdiction
governing its creation, organization or formation, (iii) the legal capacity of
natural persons who are parties to the documents examined by us, (iv) that each
of the parties to the documents examined by us has the power and authority to
execute and deliver, and to perform its obligations under, such documents, (v)
the due authorization, execution and delivery by all parties thereto of all
documents examined by us, (vi) the receipt by each Person to whom Preferred
Securities are to be issued by the Trusts (collectively, the "Preferred Security
Holders") of a Preferred Security Certificate for such Preferred Security and
the payment for the Preferred Security acquired by it, in accordance with the
Trust Agreements and the Registration Statement, (vii) that the Preferred
Securities are issued and sold to the Preferred Security Holders in accordance
with the Trust Agreements and the Registration Statement; and (viii) that Bank
One Delaware, Inc. satisfies the requirements of Section 3807 of the Delaware
Statutory Trust Act. We have not participated in the preparation of the
Registration Statement or Prospectus and assume no responsibility for their
contents.
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder which are
currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. Each Trust has been duly created and is validly existing in good
standing as a statutory trust under the Delaware Statutory Trust Act, 12 Del.
C.ss.3801, et seq.
2. When each of the Trust Agreements shall have been duly authorized,
executed and delivered by each party thereto, the Preferred Securities of each
Trust will be duly authorized by each Trust Agreement and upon issuance against
payment therefor will be duly and validly issued and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of their respective Trust.
3. The Preferred Security Holders, as beneficial owners of the Trusts,
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Trust Agreements.
<Page>
Fund American Trusts I-III
June 27, 2003
Page 4
We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement. In addition, we hereby
consent to the reference to us as local counsel under the headings "Legal
Matters" in the Prospectus. In giving the foregoing consents, we do not thereby
admit that we come within the category of Persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission promulgated thereunder.
Except as stated above, without our prior written consent, this opinion may not
be furnished or quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger P.A.
WF/DSG