Coastal Texas Home Insurance Rates

Rockport, TX: Texas coastal house on canal pre Hurricane Irma

While windstorm insurance is not required in Texas, it is often a necessity if you live near the coast. In certain areas there is a good chance that your mortgage lender will require that you carry a windstorm policy.

A windstorm policy will cover damage that is done by wind or hail. These are the only two perils that these insurance policies cover so you will need to carry a standard homeowners insurance policy to be completely covered.

While windstorm insurance can be pricey, if you home is damaged or destroyed by a hurricane or other major windstorm, a wind and hail policy can be a financial lifesaver.

Windstorm insurance is available from both private insurers and the Texas Windstorm Insurance Association (TWIA), which acts as the insurer of last resort in certain coastal counties.

Here is everything you need to know about windstorm insurance in the Lone Star state:

High Risk Areas In Texas

The Texas Windstorm Insurance Association (TWIA) was established by the Texas Legislature in 1971 in response to Hurricane Celia. It provides wind and hail insurance to 14 coastal counties that are not properly served by private insurers. They are the insurer of last resort for specific coastal counties where it can be difficult to find coverage in the private insurance market.

The Texas coast is no stranger to severe weather, with hurricanes and tornadoes occurring on a fairly regular basis. One of the worst storms to hit the Lone Star state was Hurricane Harvey, which struck in 2017. Harvey caused roughly $125 billion in damage and ranks as the second most expensive hurricane to hit the United States.

Harvey impacted an estimated 13 million people and roughly 135,000 homes, were damaged or destroyed due to historic flooding.

Due to the major damage caused by hurricanes and the fact that the Texas coast gets hit on a pretty regular basis, many insurers no longer write policies in the area and the ones that do often exclude damage from wind and hail which means homeowners on the coast often need to carry a separate wind and hail policy.

If you are unsure if your currently policy offers wind and hail coverage, read over your current policy or contact us to review your coverage options. If it turns out that this type of damage is excluded you may need to check into a policy with the TWIA.

It should be noted that a standard homeowners policy nor a TWIA wind and hail policy will not cover flooding damage, which was a major factor in Harvey and other Texas hurricanes. In order to be fully protected you need to carry a flood insurance policy as well.

What does a Wind and Hail Policy Cover?

A windstorm insurance policy is designed to fill the gap that is left by homeowners policies that exclude coverage for wind and hail damage. While private market policies may include additional protection, TWIA policies only cover damage that is caused by wind or hail, all other damage is excluded by law so these policies do not cover fire, vandalism or any damage that is not caused by wind or hail. Like all homeowner policies, flood damage is never covered.

A wind and hail policy protects not only your home but your personal belongings as well. In addition, all outbuildings and other detached structures on your property will be covered. This includes sheds, outbuildings, garages and even swimming pools.

Remember, flood and storm surge damage is never covered by a standard private market policy or a TWIA policy. If there is any risk of flooding at your home you will need to carry a separate flood insurance policy. Flood insurance is available in both the private market and the National Flood Insurance Program (NFIP).

Wind and hail insurance is available in the private market in most areas of Texas but in specific coastal areas it can be difficult or impossible, making the TWIA a necessity.

TWIA Details

The Texas Windstorm Insurance Association is the state run insurance company, which offers windstorm insurance policies to homeowners who are unable to find coverage in the private market. The TWIA is overseen by the Texas Department of Insurance.

The TWIA does not employ its own agents, the policies are sold through standard agents who also offer private market insurance. The TWIA is considered the insurer of last resort in Texas but in some cases you may not qualify as there are requirements for a TWIA policy.

As with most insurance companies, once a named storm grows to a certain size or enters the Gulf of Mexico, you will not be able to buy a TWIA policy until after the storm has cleared the area so always get coverage in place before the hurricane season kicks off.

According to the TWIA, you must meet the following requirements to purchase a policy:

• Properties must be located in the area designated by the Commissioner of Insurance, which currently includes all 14 first-tier coastal counties (Aransas, Brazoria, Calhoun, Cameron, Chambers, Galveston, Jefferson, Kenedy, Kleberg, Matagorda, Nueces, Refugio, San Patricio and Willacy) and parts of Harris County east of Highway 146
• You must have been rejected by at least one other insurance company that issues windstorm policies in your area.
• If your home was built, altered, remodeled or enlarged after Aug. 31, 2009, and is located in a flood zone that starts with a V (the highest risk) you will have to show proof that you are carrying a flood insurance policy before you can purchase a TWIA policy.
• Your home will need to be certified by the TDI or TWIA as being compliant with their windstorm building code specifications. Once you apply for a policy your home will be inspected. If it passes you will be issued a certificate of compliance, either WPI-8 or WPI-8-C.
• The home must be maintained. If you have unrepaired damage you may not be eligible for a policy.

What Coverages are Offered by TWIA?

A policy issued by the TWIA only covers hail and wind damage, all other damages are excluded. Here are a few important details of TWIA policies:

• Dwelling Coverage: Dwelling coverage is what pays to repair or rebuild your home after it is damaged by wind or hail. It will also cover swimming pools, fences and any other structures on your property such as outbuildings, sheds and detached garages. These additional structures are protected at 10 percent of total dwelling coverage.
• Contents Coverage: This part of the policy pays to repair or replace your personal property, which includes items such as furniture, clothing, electronics and any other personal property in your home. Personal property coverage is capped at $374,000 with a TWUA policy.
• Additional Living Expenses: This coverage will cover expenses if you cannot live in your home because it has been severely damaged by hail or wind. This may include hotel bills, restaurants, dry cleaning and other approved expenses. This coverage is limited to 20 percent of your total dwelling coverage.
• Increased Cost of Construction (ICC): This part of the policy will cover any additional expenses related to the bringing your home up to current code if it has to be repaired or rebuilt.

• Debris Removal: This coverage pays to clean up the debris that is on your property due to wind and hail. As an example, if you have a tree come down due to wind, this will cover the cost to clean it up.

Deductibles and Rates With TWIA

While rates will vary dramatically depending on your personal factors and the home you are insuring, according to TWIA data, the average rate for a windstorm policy is $1,587 a year.

Like all insurance policies, a TWIA policy comes with a deductible. You can choose from a flat rate deductible, which will result in a higher premium or a percentage deductible, which will lower your premium. In the majority of coverage areas, you can choose from the following deductibles:

Flat Rate Deductible: $100 or $250

Percentage: 1, 1.5, 2, 2.5, 3, 4, or 5 percent

A percentage deductible means that you will pay a percentage of the total dwelling coverage as your deductible. As an example, if you are carrying $300,000 in coverage and have a 3 percent deductible, you will be forking up $9,000 before you insurance kicks in. The higher your deductible, the lower your premium but always choose a deductible that you can easily afford in case you have to make a claim.