The New Year is quickly approaching. For many TWIA policyholders, this means evaluating and renewing their insurance policies. Below are some common questions policyholders should consider when discussing policy renewal with their agent - no matter what time of year this conversation occurs.
Why did my premium change? I didn’t make any changes to my policy coverage for 2019.
Each year at renewal, a policy will slightly increase the amount of coverage to keep pace with the rising cost of building materials. While this automatic change is designed to ensure policyholders have sufficient coverage in the case of a loss to their home, this additional coverage is optional and can be adjusted by your agent. The endorsement is available for review here: TWIA 220 – Automatic Adjusted Building Cost.
Do I have enough coverage to rebuild after a storm?
There are several questions that will help policyholders and agents arrive at an appropriate coverage amount.
Have I made any structure changes? Talk with your agent about changes to your home or other insured structures which may require an increase in your coverage amount to maintain your level of coverage. This could include upgrades, additions, and repairs to a home, and changes to local costs of construction.
What’s the replacement cost of my property? To be eligible for replacement cost value coverage, the property on a TWIA policy must be insured to 80% of the cost to rebuild. However, TWIA recommends all properties be insured to 100% of the cost to rebuild, so in the event the structure is completely destroyed, the claim payment would most closely match the cost to rebuild (minus the deductible). Visit our dedicated webpage to learn more about insurance to value.
What endorsements do I have such as Automatic Adjusted Building Cost, Additional Living Expenses, etc.? Please also discuss other aspects of your TWIA policy coverage with your agent, such as personal property, replacement cost for personal property and Indirect Loss Coverage, including Additional Living Expenses (ALE), which may need to be updated for 2019. Sample policies and endorsements are available for review on our dedicated webpage.
Can I afford my deductible amount?
Following Hurricane Harvey, we saw that some TWIA policyholders were surprised by the dollar amount of the deductible they had chosen. This surprise is avoidable! The deductible is the amount of money the policyholder must pay out-of-pocket toward covered damages before TWIA can pay for a claim. Policyholders do not actually pay their deductible to TWIA when they file a claim. Instead, the deductible is subtracted out of a claim payment for covered damage before it is sent to them.
While higher deductibles mean lower premiums in the short term, they also mean that when there is damage, even if it is covered, the policyholder must pay a larger amount out of pocket before any claim payment from TWIA.
This deductible can apply to repairs that require additional costs to meet applicable building code requirements, unless policyholders have separate coverage for the increased cost of construction. If a policyholder doesn't already have the endorsement for Increased Cost of Construction (ICC) coverage (residential: TWIA 431, commercial: TWIA 432), discuss if it should be added to the policy.
What else should I consider when renewing my policy?
Have any repairs been made to the property which require a Certificate of Compliance (WPI-8/WPI-8-C)? If so, a Certificate of Compliance for applicable construction must be submitted to TWIA to complete the policy renewal. More information about windstorm certification requirements can be found on our website.
Please contact your agent or the TWIA Underwriting team with any questions at 800-788-8247. We are ready to help and are available Monday through Friday, 8:00 a.m. to 5:00 p.m.