New TWIA Endorsements on the Horizon
Lee Loftis, Governmental Affairs
The Texas Department of Insurance has approved new endorsements for use by the Texas Windstorm Insurance Association on its dwelling policies.
TWIA 220 (Automatic Adjusted Building Cost Endorsement)
The new TWIA 220 will replace the old TWIA 200 and will be added to all new policies effective March 1, 2012 and on all renewal policies beginning May 1, 2012.
This is a mandatory endorsement stating that Coverage A on the dwelling policy shall be revised annually by a percentage established by a building cost index and that it will be applied at each renewal. The insured may request modification of this change in the limit of liability by submitting a new MSB replacement cost estimator.
TWIA 310 and 320 (Extensions of Coverage)
Additional endorsements have been approved and TWIA will begin using these on new business on June 1, 2012 and on renewals on Aug. 1, 2012. Specific extensions of coverage addressed in the endorsements include consequential loss and additional living expense.
Consequential loss applies to both primary and secondary dwellings and coverage is afforded for loss due to change in temperature as a direct result of physical damage to the dwelling or equipment contained in the dwelling, caused by windstorm or hail.
The endorsements also provide $500 coverage for loss due to change in temperature as a direct result of physical damage to power, heating or cooling equipment not contained in or on the dwelling and caused by windstorm.
Both the TWIA 310 and the 320 clarify that additional living expense (ALE) on the TWIA policy does not cover voluntary or mandatory evacuation, unless windstorm or hail make the property untenantable. It further clarifies that ALE coverage only applies to primary residences and not to secondary residences.
The TWIA 310 has been changed to provide a total for all additional living expenses to 20 percent of the applicable limit of Coverage A (Dwelling) which now matches the limit available under the TWIA 320 endorsement