Dear Agent,

The New Year is quickly approaching. For many TWIA policyholders, this means evaluating and renewing their insurance policies. Below is information that can help you answer policyholder questions – no matter when they renew.

Why did my premium change? I didn’t make any changes to my policy coverage for 2019. 

Review the endorsement TWIA 220 – Automatic Adjusted Building Cost. Each year at renewal, the policy will slightly increase the amount of coverage to keep pace with the rising cost of building materials. While this automatic change is designed to ensure policyholders have sufficient coverage in the case of a loss to their home, this additional coverage is optional and can be adjusted by the agent.

Do I have enough coverage to rebuild after a storm? 

Any structure changes? Talk with your client about changes to their home or other insured structures which may require an increase in their coverage amount to maintain their level of coverage. This could include upgrades, additions, and repairs to a home, and changes to local costs of construction.

What’s the replacement cost? As a reminder, to be eligible for replacement cost value coverage, the property on a TWIA policy must be insured to 80% of the cost to rebuild. However, TWIA recommends all properties be insured to 100% of the cost to rebuild, so in the event the structure is completely destroyed, the claim payment would most closely match the cost to rebuild (minus the deductible). Visit our website for more about insurance to value.

Endorsements, ALE, etc.? Please also discuss other aspects of your client’s TWIA policy coverage, such as personal property, replacement cost for personal property and Indirect Loss Coverage, including Additional Living Expenses (ALE), which may need to be updated for 2019. Sample policies and endorsements are available for review on our website.

Can I afford my deductible amount?

Following Hurricane Harvey, we saw that some TWIA policyholders were surprised by the dollar amount of their deductible—bad news at the worst possible time. But this is one bad surprise that is avoidable! Make sure your client knows how a deductible works: the amount of money the policyholder must pay out-of-pocket toward covered damages before TWIA can pay for a claim. Policyholders do not actually pay their deductible to TWIA when they file a claim. Instead, the deductible is subtracted out of a claim payment for covered damage before it is sent to them. 

While higher deductibles mean lower premiums in the short term, they also mean that when there is damage, even if it is covered, the policyholder must pay a larger amount out of pocket before payment from TWIA kicks in. 

This deductible can apply to repairs that require additional costs to meet applicable building code requirements, unless policyholders have separate coverage for the increased cost of construction. If your client does not already have the endorsement for Increased Cost of Construction (ICC) coverage (residential: TWIA 431, commercial: TWIA 432), discuss if it should be added to their policy.

What else should I consider when renewing my policy?

Ask your clients if they made any repairs to their home which require a Certificate of Compliance (WPI-8/WPI-8-C). If so, a Certificate of Compliance for applicable construction must be submitted to TWIA to complete their policy renewal. More information about windstorm certification requirements can be found on our website.

Thank you for helping ensure TWIA policyholders have the right coverage to meet their needs in the coming year.

If you have any questions or concerns, please contact TWIA Underwriting at 800-788-8247. We are ready to help and are available Monday through Friday, 8:00 a.m. to 5:00 p.m.