By Doug Shields, TWIA & TFPA Agent Auditor, CFE, CIA

In order to be eligible for windstorm coverage with TWIA, an applicant or agent must have received at least one declination (or refusal) of windstorm coverage for the property from an authorized insurer. The insurer declining windstorm coverage must be writing either new or renewal windstorm and hail coverage somewhere in the 1st tier coastal counties. A surplus lines carrier does not qualify. This requirement went into effect on February 24, 2010 and it is spelled out in Texas Insurance Code Chapter 2210, TWIA’s Plan of Operation in the Texas Administrative Code (TAC §5.4902, §5.4903), and the Commissioner’s Order 09-0714.

A declination (or refusal) of coverage can be either of the following:

1. An insurer’s refusal to offer or a refusal to renew coverage with windstorm and hail,

OR

2. An offer for a policy that includes windstorm and hail coverage that is not substantially equivalent in basic coverage to that offered by TWIA. An example where coverage is not substantially equivalent could be the following:

a. The applicant is seeking coverage on a replacement cost basis, but the policy offered to the applicant only offers coverage on an actual cash value basis.

OR

b. The applicant is seeking coverage with a certain windstorm and hail deductible, but the policy offered to the applicant only offers a mandatory deductible that is higher than what the insured wants and is higher than what is offered by TWIA.

(Note: A situation where a policy offered to the applicant requires a higher premium for windstorm coverage than the premium required by TWIA does not qualify as a refusal of coverage.)

More information is available on our website.