Homeowners in the Clear Lake area should take some time to read the article by the Houston Chronicle, “Home insurance costs are soaring. Here’s what to know about the Texas Fair Plan Association“. TFPA might be providing your insurance in the near future.
In 1971 Texas created the Texas Windstorm Insurance Association (TWIA). It was advertised as the insurance of last resort covering those in the coastal areas who could not find insurance from the private sector. In 1995 Texas created the Texas Fair Plan Association (TFPA). It was advertised as the insurance of last resort covering those in the under served areas who could not find insurance from the private sector. Sound familiar?
Up until 2003 TWIA was providing service to a small number of property owners. Now it isn’t the last resort. It’s almost the only resort. Private insurance companies have fled the coastal areas leaving most owners to seek coverage from TWIA. I have little knowledge of TWIA, except that they are a non-profit organization and sell policies just like the private sector. TWIA issues detailed yearly assessments of their policies and financial situation. They are transparent to the public. When they ask for a 10% increase in rates they can prove it with data, data that is publicly available.
When did you ever see your insurance company justify their 25% increase or the reason why they will not renew your policy? As with TWIA I know little about the Texas Fair Plan except that they are managed by TWIA and like TWIA they are the insurance of last resort. They are also transparent and a non-profit. I think homeowners in the Clear Lake area should read the articles about the TFPA because it may become the last resort. 5 of the 6 largest insurance companies in Texas that make up the Texans for Affordable Insurance Solutions (TCAIS) will no longer write policies in the Clear Lake area.
Maybe it is time for all insurance companies to leave the state and let the non-profits provide service.
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TFP only provides $5k coverage in water damage and does not allow you to add a water damage rider. Better get your galvanized pipes replaced! I had a pinhole leak that resulted in a $44K claim, which my private insurer paid. 5 days later, my next door neighbor had a leak. Her $6K TFP deductible was more than the TFP $5K coverage. If TFP is to become the only option, the policy needs to be beefed up similar to a private policy.
Good info! Yep. USAA removed the water damage portion of my policy back in 2006 or so. I had to pay to add it back. I know very little about TFPA but it concerns me because that looks like the way we are going.