Windstorm insurance is not a required coverage in the state of Texas but depending on where you live it can be an absolute necessity. In some areas, your mortgage lender may require you carry a windstorm policy.

This insurance will help pay for damage that is done by wind or hail, these are the only two perils covered by these policies. While windstorm insurance can be somewhat pricey in areas, if your home is damaged or destroyed by a hurricane this insurance can be a financial lifesaver.

Windstorm insurance is available from private insurers but in many counties you may need to purchase a policy from the Texas Windstorm Insurance Association (TWIA). Following is everything your need to know about this important coverage.

How Windstorm Insurance Works in Texas

While windstorm insurance is not legally required in Texas, some mortgage lenders may require it, especially if you live in a high-risk area.

Windstorm insurance will cover direct damage that is done to your home by wind and hail. In many cases, these policies will not only pay to repair or rebuild your home but also offer loss of use coverage which helps pay for hotel and restaurant bills if you are unable to live in your home due to damage caused by wind or hail.

Windstorm insurance does come with a deductible, the amount you have to pay before the insurance policy kicks in, and it can be different than a standard insurance deductible. Some windstorm policies come with a flat amount deductible, as an example, $1,000, which means you would have to pay for the first $1,000 in repairs and then your insurance policy would cover the rest.

However, some windstorm policies come with a percentage deductible. This means that you pay a percentage of the policies total dwelling coverage limit as the deductible. As an example, if your policy has a 2 percent deductible and you are carrying $200,000 in coverage your deductible would be 2 percent of $200,000 or $2,000.

Deductibles can run anywhere between 1 and 5 percent normally but can go higher in certain areas.

Windstorm insurance is available from both private insurers or from the Texas Windstorm Insurance Association (TWIA) which is a state run organization that is directed by the Texas Department of Insurance. It is the insurer of “last resort” and you must have been rejected by at least one private insurer in order to qualify. TWIA insurance is only available in certain counties, mainly on the Gulf Coast.

Do You Need Windstorm Insurance?

Legally you are not required to carry windstorm insurance in Texas but if your home is in a high-risk area you mortgage lender will most likely require that you carry a policy.

The following counties are generally considered high-risk and TWIA policies are offered here:

• Aransas
• Calhoun
• Chambers
• Galveston
• Kenedy
• Matagorda
• Refugio
• Willacy
• Brazoria
• Cameron
• Harris (east of Highway 146)
• Jefferson
• Kleberg
• Nueces
• San Patricio

TWIA Insurance Details

The TWIA is a state backed insurer that offers windstorm insurance to Texas homeowners who have been rejected for windstorm insurance in the private market. The company is overseen by the Texas Department of Insurance.

The TWIA does not have its own insurance agents, you can purchase their policies through normal insurance agents that sell homeowners insurance. While TWIA is meant to be the insurer of last resort, you may not qualify for a policy under TWIA requirements.

It is also important to remember that once a named storm enters the Gulf of Mexico you are unable to purchase a TWIA policy until the storm has made landfall and cleared the area so it is always wise to have coverage in place before the storm season.

In order to qualify for a TWIA policy you must meet a number or qualifications:

• You must have been rejected by at least one other insurer that writes windstorm policies in your area. If you were offered a policy but it didn’t meet your needs or has limited protection that counts as a rejection.
• If your home was built, altered, remodeled or enlarged after Aug. 31, 2009, and it's located in a flood zone that starts with a V (the highest risk) you will need to show proof that you are carrying a flood insurance policy before you can purchase a TWIA policy.
• Your home and property needs to be certified by the TDI or TWIA as being compliant with their windstorm building code specifications. Your home will be inspected and you will be issued a certificate of compliance, either WPI-8 or WPI-8-C.
• You must maintain your home. If there is unrepaired damage you may not be eligible for a policy.

What Coverage is Offered by TWIA?

These policies only cover damage from wind or hail, they do not cover damage from any other perils. Here is a quick overview of what is covered by a TWIA policy:

• Dwelling Coverage: This will pay to repair or rebuild your home if it is damaged by wind or hail. It also protects additional items on your property such as fences and swimming pools. Additional structures on the property such as garages and sheds are protected at 10 percent of your total dwelling coverage limit.
• Contents Coverage: This covers your personal property. It includes furniture, electronics, clothing, appliances and other personal property in your home. The max coverage limit for contents is currently $374,000.
• Additional Living Expenses: If your home is severely damaged by wind or hail and you cannot live in it this coverage will help defray some of the additional costs you incur. This can include hotel bills, restaurants and even laundry mat expenses. This coverage is limited to 20 percent of your total dwelling coverage.
• Increased Cost of Construction (ICC): This coverage will pay for additional costs related to bringing your home up to current code if it was damaged. As an example, if your home is damaged and building codes have changed since it was first built, this coverage would pay for any additional costs incurred to bring it up to code.
• Debris Removal: This portion of the policy will pay to clean up any debris that has made its way onto your property due to wind or hail damage. If a tree is blown over onto your property this coverage will pay to clean it up.      

Currently, the max dwelling coverage limit is $1,773,000.

There are coverage exclusions with TWIA policies. The following are generally not covered:

• Cloth awnings
• Greenhouses
• Satellite dishes and antennas
• Lawnmowers
• Storm doors
• Cars and motorcycles
• Boats

TWIA Deductibles and Rates

TWIA policies all come with a deductible and the deductible you choose will impact your premium. The higher the deductible, the lower the rate, in most cases you can choose a flat rate deductible (this will push your premium up) or a percentage deductible. In most areas the following deductibles are offered:

Flat Rate: $100 or $250

Percentage: 1, 1.5, 2, 2.5, 3, 4, or 5 percent. While a percentage deductible will mean you pay more out of pocket when making a claim, your premium will be lower.

According to TWIA statistics the average rate for windstorm insurance is $1,587 but costs can vary dramatically depending on your location and the type of home you are insuring.

To get a quote, you can go to www.texaswindstorminsurance.co...