In 1980, I went to work at the Texas Department of Insurance (TDI). Early in my career I found a passion for property and casualty insurance. To broaden the scope of my knowledge, I took numerous property and casualty insurance classes and achieved the Chartered Property and Casualty Underwriters (CPCU) designation in 1995. I retired from TDI in 2010 as the Deputy Commissioner of Personal and Commercial Lines of Insurance. I have always enjoyed helping others, including assisting with their insurance-related issues. In 2012, I had the opportunity to come to the Office of Public Insurance Counsel (OPIC). Today, I share my knowledge and experience to help empower insurance consumers.
The Texas Windstorm Insurance Association (TWIA) provides the majority of wind damage coverage in designated areas along the Texas coast. The insurance claim process for TWIA is unique and unlike the claim process for other insurers.
You can find helpful information regarding the claim process on the Texas Department of Insurance’s (TDI) Coastal Outreach and Assistance Services Team (COAST) Resource page: http://www.tdi.texas.gov/consumer/coast/index.html and TWIA’s own website: https://www.twia.org/wp-content/uploads/2017/03/Claims-Dispute-Resolution.png.
Below are some key points relating to TWIA claims:
- Flood damage. The TWIA policy DOES NOT cover damage caused by a flood.
- House Bill 1774 that became effective September 1, 2017. The changes in House Bill 1774 do not apply to claims or lawsuits with TWIA.
- Claim filing deadline. You have one year from the date your property was damaged or destroyed to file a TWIA claim.
- If you dispute the amount of your claim TWIA accepts. If TWIA agrees to pay your claim, either partially or fully, you must work with TWIA to resolve your dispute or request the appraisal process to dispute the amount. If you don’t request the appraisal process to dispute the amount, TWIA’s decision is final after 75 days.
- If you plan to file a lawsuit because your claim was partially or fully denied. If you dispute TWIA’s decision to partially or fully deny coverage for your claim and you intend to file a lawsuit, you must notify TWIA of your intent to file a lawsuit within two years of receiving TWIA’s decision to deny coverage. If you miss the two year deadline, you waive your right to contest TWIA’s denial of coverage.
- Prior to filing a lawsuit. TWIA may require you to submit your dispute to alternative dispute resolution (ADR) prior to you filing a lawsuit. Mediation is the primary form of dispute resolution utilized by TWIA.
TDI and OPIC have information to assist consumers with Hurricane Harvey-related issues, including how to file a claim, at http://www.tdi.texas.gov/consumer/storms/helpafterharvey.html and www.opic.texas.gov. It is important to review you insurance policy and inspect your property thoroughly in order to maximize your insurance recovery.
Is Your Homeowners Premium Quote or Renewal Premium too High?
You may be able to save a significant amount of money on your homeowners insurance if you simply shop.
The State of Texas has developed some easy to use resources to help you shop for homeowners insurance. Companies charge a wide range of premiums for homeowners insurance in Texas. You can find sample homeowners insurance premiums for your zip code at www.helpinsure.com. For example, sample premiums for a person with good credit, no claims, and a frame home in Tarrant County can range from $1,132 to $3,120. Of course the insurance coverage provided for these amounts can also vary significantly. That is why you should compare the coverage provided by the policies you are considering.
You can compare different companies’ policies and find explanations of key insurance provisions and terms at www.opic.state.tx.us.
Some ways policies differ can include:
- Does the policy provide named peril or all risk coverage?
- Does the policy provide actual cash value or replacement cost coverage?
- What type of water damage coverage does the policy provide?
Comparing policies will help you identify policies that meet your insurance needs. After reviewing sample premiums and comparing policies, you should do some research about the companies you are considering. Check the Texas Department of Insurance (TDI) website at www.tdi.texas.gov to verify the company is licensed, view its financial information, and to see the number of complaints TDI has received on the company. You can also contact TDI at 1-800-252-3439 for this information.
Finally, you should contact an insurance agent, or the company directly, to get actual premium quotes and discuss the policies you are considering. Company contact information may be found at www.helpinsure.com or TDI’s Company Lookup on its website. Questions you should ask include:
- What types of property are not covered or have limited coverage?
- What types of losses does the policy cover and what type of losses are not covered?
- What discounts or credits do you offer?
- What is the dollar amount of each deductible?
- What type of loss does each deductible apply to and how is each deductible applied?
Hopefully these tools will help you save some money and find insurance that meets your needs. Insurance is a complicated subject that most people do not want to talk about. We do. Please contact the Office of Public Insurance Counsel with any insurance questions you may have. You can contact us at www.opic.state.tx.us or at 512-322-4143.
What is a Deductible?
A deductible is the portion of a covered loss you must pay before your insurance company pays for any of the loss. Typically, your insurance company will simply subtract the deductible from the total amount of your claim, rather than requiring you to pay the deductible up front.
Types of Deductibles
Your policy may have different deductibles based on the reason for your claim. A typical Texas homeowners policy will have two deductibles:
- Clause 1 deductible - applies to claims involving covered windstorm damage; and
- Clause 2 deductible - applies to claims involving all other types of covered damage.
Some insurance policies may also include a “named storm” or “tropical cyclone” deductible. This deductible applies when a hurricane or named storm damages your home. Your regular Clause 1 deductible will apply in the event that damage occurs from a thunderstorm or tornado unrelated to a hurricane or named storm. Named storm deductibles are usually much higher than other policy deductibles. This means you are responsible for a larger portion of any loss involving damage from a hurricane or named storm.
Not all policies contain named storm deductibles. It is important to understand what deductibles apply to your policy. Ask your agent or other company representative if you are unsure if your policy contains a named storm deductible.
Calculating the Deductible
Insurance companies can calculate deductibles as either a fixed dollar amount or a percentage of your home’s insured value. A dollar deductible provides an easy way to anticipate the amount you are responsible for in the event of a covered loss. For example, if you have a $500 deductible, you are responsible for $500 of the loss and the company pays for the rest of your loss, up to the policy limits. Percentage deductibles are calculated as a percentage of your home’s insured value and not a percentage of the claim amount. For example, if your home is insured for $100,000 with a 1% deductible, you would be responsible for $1,000 of any loss. A 2% deductible on that same policy means you’re responsible for $2,000 of any loss.
Unlike the amount of a dollar deductible, which remains constant, the amount of a percentage deductible increases every time the insured value of your home increases. For example, with a 1% deductible, if your home’s insured value increased from $100,000 to $110, 000 upon renewal, you would be responsible for $1,100 of a loss, instead of the $1,000 you were responsible for during the prior policy term.
Choosing a Deductible
You may be able to choose the amount of your deductible. This is important because the amount of your deductible can have a direct impact on how much your insurance costs. Choosing a higher deductible means your insurance company bears less of the risk for damage to your home, and this can translate into lower premiums for you. The disadvantage to choosing a higher deductible is that you are responsible for a larger portion of any loss. On the other hand, if you choose a smaller deductible, you’re responsible for a smaller portion of any loss, but your premiums will likely increase. Don’t be afraid to ask your agent or company representative to explain what deductible options are available to you, and how each option will impact your coverage and the price of your insurance.
It is becoming more common for Texas property owners to be subject to a homeowners association (“HOA”). While HOAs have long been associated with condominium ownership, more single-family subdivisions now have them. HOAs have definite benefits for property owners. They allow owners to jointly cover common expenses and add amenities for the common use of the HOA members at a much lower cost than if each member purchased the amenity or covered the expense individually.
While the benefits of HOAs are evident, one of the risks isn’t: the loss assessment risk. Within the HOA agreement, the HOA very likely has the right to levy a “loss assessment” against all HOA members as a result of a covered loss that is not fully covered by the HOA’s insurance and funds on hand.
As an example, say an accident occurs at the HOA-owned swimming pool and a judgment is entered against the HOA for $1,500,000. Assume the HOA’s liability coverage is $1,000,000 and there are no HOA operating funds available to pay the loss. Further assume there are ten members in the HOA. How will the remaining $500,000 be paid to satisfy the judgment? The HOA will assess each member $50,000 (their share of the loss). Loss assessment coverage would pay the assessment up to the policy limit. Therefore, if your loss assessment coverage limit is $50,000, the coverage would pay the assessment and the HOA member would not owe any additional funds.
When considering this coverage, be aware that it has limitations. Most loss assessment coverage is triggered only when the loss would have been covered by the HOA policy’s terms and conditions but there were insufficient policy limits. The loss assessment coverage will not provide any benefit if the loss is not covered or is excluded under the HOA’s policy, the HOA policy provided only defense costs but no indemnity coverage, or if the HOA’s policy has lapsed.
What should the prudent HOA member do? First, make sure you understand the risk exposure you have as a member of the HOA. To do this, talk with your HOA board, review your HOA documents, and determine the amount and status of the HOA’s insurance coverage. If changes should be made, suggest them to the HOA board. Second, if you perceive that you still have some risk of a loss assessment, talk with an insurance professional about the appropriate amount of loss assessment coverage you should have. Remember, this coverage is very inexpensive and can protect you from a large financial loss when you perhaps could least afford it.
Do you have questions? We would love to help. Please send me an email (firstname.lastname@example.org) or give me a call (512-322-4143).
Are you looking for a company that writes the standard HO-B homeowners policy?
The following companies on our comparison tool presently write the HO-B:
AMEX Assurance Company
Apex Lloyds Insurance Company
Armed Forces Insurance Exchange
ASI Lloyds (newly constructed homes only)
Chubb Lloyds Insurance Company
Dallas National Insurance Company
Delta Lloyds Insurance Company of Houston
Federal Insurance Company
Imperial Fire and Casualty Insurance Company
Middle States Insurance Company, Inc.
National Specialty Insurance Company
Republic Underwriters Insurance Company
Southern Insurance Company
Stonington Lloyds Insurance Company
Trinity Universal Insurance Company
Unitrin Safeguard Insurance Company
Universal Insurance Company of North America,
U.S. Lloyds Insurance Company
Do you have questions?
Please contact us at 877-611-6742 or by email: email@example.com