Texas Fair Plan Association

What is the Texas FAIR Plan Association and its purpose?
The Texas FAIR Plan Association is an entity established by Texas Insurance Code
Article 21.49A to provide residential property insurance to qualified consumers who are having difficulty obtaining this coverage from licensed insurance companies.

Who is eligible to apply for coverage through the Texas FAIR
Plan Association?
Consumers who have been declined residential property insurance by at least two
insurance companies licensed to write and actually writing residential property
insurance in Texas may apply for coverage. In addition, to be eligible, consumers may
not have received a valid offer of comparable residential property insurance from an
insurance company licensed in Texas (not including any surplus lines insurers).

What types of residential property insurance will the Texas FAIR Plan Association provide for eligible applicants?
The Texas FAIR Plan Association provides limited coverage for one and two family
dwellings, townhouse units, and condominium units that are owner occupied and that
meet its underwriting standards. The Texas FAIR Plan Association also provides
limited coverage for other residential property –i.e. rental dwellings (one and two family), their contents and personal property of tenants living in rental dwellings.

Can the Texas FAIR Plan Association refuse to insure an eligible applicant?
Yes. The Texas FAIR Plan Association may refuse to insure an applicant if the
applicant or the property to be insured does not meet the Texas FAIR Plan
Association’s underwriting standards.
Revised 06/29/2007

What are some of the underwriting standards that may cause an eligible applicant to be denied coverage through the Texas FAIR Plan Association?
An applicant may be denied coverage through the Texas FAIR Plan Association for any
of the following reasons:
• Property condemned due to condition of the property.
• Property in disrepair or with existing damage.
• Vacant property.
• Property with excessive or unusual liability exposure, (e.g. dangerous animal,
pool or trampoline not within a fenced yard).
• Applicant who has a conviction for arson, fraud, or other insurance related
offenses.
• Applicant with more than eight paid claims (excluding glass claims) within the
past three years.
• Mobile home, unless the wheels are removed and the mobile home is tied down.
• Farm or ranch used for business.
• Any dwelling occupied for business use.

How do I obtain coverage through the Texas FAIR Plan Association?
Coverage must be obtained through an authorized licensed Texas agent. Any agent
licensed to write property & casualty insurance in Texas can be authorized to write
coverage through the Texas FAIR Plan Association. To find an authorized agent in your
area, you can go the Texas FAIR Plan Association website
http://www.texasfairplan.org/.

Can you apply directly to the Texas FAIR Plan Association for coverage?
No. You may apply for coverage only through an authorized agent of the Texas FAIR
Plan Association.
Revised 06/29/2007

How long can I be insured with the Texas FAIR Plan Association?
Policies are issued for a term of one year, however, every two years you must reapply
for residential property insurance in the voluntary market. You will be eligible for a renewal policy with the Texas FAIR Plan Association if you are declined residential
property insurance by at least two insurance companies licensed to write and actually
writing residential property insurance in Texas and if you do not receive a valid offer of comparable residential property insurance from an insurance company licensed in Texas, not including any surplus lines insurers.

How are the coverages offered through the Texas FAIR Plan Association different than coverages offered by other insurers?
The Texas FAIR Plan offers policies with limited coverage. Many insurers add
coverages that are not provided in the basic policy offered by the Texas FAIR Plan
Association.

The following is a list of the additional perils that may be covered by other
insurers in their policies, which are not covered in a Texas FAIR Plan Association
policy:
• ***Sudden and accidental discharge of water or steam
• Falling trees or limbs, falling objects
• Collapse of a building or a part of a building
• Breakage of glass
• Damage from the weight of ice, snow or sleet
• Freezing of plumbing, heating, air condition or automatic fire protective
sprinkler system or household appliance
• Mold, fungi or other microbe remediation (insurers provide or offer this
coverage for the basic perils)
Revised 06/29/2007
• Back up of sewer or drains
• Items that may be scheduled, such as expensive jewelry
*** For an additional premium charge, may be added by endorsement to the following
policy forms: Homeowners policy (HO-A), Renter policy (HO-BT) and
Condominium policy (HO-CONB)

How do the rates charged by the Texas FAIR Plan Association compare to those charged by other insurers?
Insurers offering residential property insurance in the voluntary market have more rating variables and discounts available for their insureds than the Texas FAIR Plan
Association. Insurer rating variables for credit scores, new homes, and companion auto policies make a comparison with rates for the Texas Fair Plan Association difficult. Since the Texas FAIR Plan Association policies provide less coverage than the policies provided by most insurers, coverage differences must also be considered when comparing rates between the Texas FAIR Plan and other insurers.

What discounts and surcharges does the Texas FAIR Plan offer?
The Texas FAIR Plan offers a discount for insureds who have had zero claims paid in
the preceding five-year period. Insureds who have had one or more paid claims in the
preceding three-year period will receive a surcharge based on the number of claims
paid. The Texas FAIR Plan Association may also offer discounts for home security devices and sprinkler systems with proper certification and documentation.

How do I file a claim on my Texas FAIR Plan Association
policy?
You may contact your agent or file a claim directly with the Texas FAIR Plan
Association by calling the toll-free number provided with your policy.
I have a complaint about my agent or about the service I received from the Texas FAIR Plan Association.

Who do I contact?
You may write the Texas FAIR Plan Association at P.O. Box 99080, Austin, Texas
78709-9080 or you may contact the Texas Department of Insurance’s Consumer
Protection Division at 1-800-252-3439 or file a complaint on-line at www.tdi.state.tx.us.

How are authorized agents of the Texas FAIR Plan compensated?
The only method of compensation for agents writing policies in the FAIR Plan is
commission. Agents are prohibited from charging fees (other than those designated by
the Texas FAIR Plan Association) and agents are prohibited from requiring ‘tie-in’ sales.

What type of coverage will the Texas FAIR Plan Association provide for my dwelling and/or personal property?
The Texas FAIR Plan Association provides limited coverage through the Texas
Homeowners Policy - Form A (HO-A), Texas Dwelling Policy – Form 1 (TDP-1), Texas
Fair Plan Condominium Policy, and Texas FAIR Plan Tenant Policy.
The policies provide:
Coverage for Your Dwelling (HO-A and TDP-1 only) – Policies provide actual
cash value coverage for your dwelling and outbuildings. Actual cash value is
replacement cost minus depreciation.

The HO-A policy can be changed to provide replacement cost coverage.
Replacement cost is what you would pay to rebuild or repair your dwelling, based
on current construction costs. Replacement cost is different from market value. It
does not include the value of your land. Replacement Cost coverage is not
available on the TDP-1.

To be eligible for replacement cost coverage you must insure your dwelling for as
close to 100 percent of its replacement cost as possible. If at the time of loss your
home is insured for less than 80 percent of the full replacement cost, the Texas
FAIR Plan Association will pay only part of the loss.

Coverage for Your Personal Property – The Homeowners HO-A policy provides
50% of the dwelling amount of insurance for household contents, clothes,
appliances, etc. This means if you insure your dwelling for $100,000, its contents
are insured for $50,000. Increased Personal Property Coverage of 60% or 70% of
the dwelling amount of insurance is available at an additional premium charge.

The Texas Dwelling policy (TDP-1), Condominium policy and Tenant policy provide
coverage for contents at selected limits up to a maximum of 50% of the dwelling
amount of insurance on the TDP-1 and up to a maximum of $500,000 on the
Condominium and Tenant policies. Limitations of coverage apply to certain
contents, including business personal property, jewelry, watches, furs, and money.
This coverage pays only the actual cash value of damaged, stolen or destroyed
household goods. Actual cash value is an item's replacement cost minus
depreciation.

For an additional premium, policies may provide replacement cost coverage for
your personal property (not available on the TDP-1). Replacement cost coverage
gives you more protection than actual cash value coverage. (Example: A burglar
steals your six-year-old television set. With actual cash value coverage your claim
payment would be based on the cost to replace the television set with a similar set
minus depreciation and your deductible. With replacement cost coverage, the
insurance company would pay to replace your TV with a new set similar to the one
stolen, minus your deductible, once you have complied with all the policy
conditions.)

The Homeowners, Condominium and Tenant policies also provide Liability,
Medical Payments, and Loss of Use coverage:
Liability Coverage – protects you against financial loss if you are legally liable for someone else’s injury or property damage up to the limit of liability.

Medical Payments – pays medical expenses for persons other than residents of
the household injured while on your premises and for some injuries that may
happen away from your premises up to the limit of liability.

Loss of Use Coverage – pays additional living expenses if your home is
uninhabitable due to a loss caused by an insured peril while repairs are being
made.

Coverage Limits – the following coverage limits are available, where applicable:
• Dwelling – Up to $1,000,000 Maximum value
• Other Structures – 10 percent of Dwelling Coverage amount
• Personal Property – 50, 60, or 70 percent of Dwelling Coverage amount on the

HO-A. Optional up to 50 percent of Dwelling Coverage on the TDP-1. For
Condominium and Tenant policies, limits are available up to a maximum of
$500,000.
• Liability - $100,000 or $300,000 limit
• Medical Payments - $5,000 limit
• Loss of Use – 10 percent of Dwelling Coverage amount, 20 percent of Personal
Property Coverage amount on the Condominium and Tenant policies.

Texas FAIR Plan Association policies provide coverage for damage caused by:
PERIL HO-A TDP-1 CONDO TENANT
FIRE
LIGHTNING
SUDDEN AND ACCIDENTAL DAMAGE FROM SMOKE
WINDSTORM, HURRICANE AND HAIL*
EXPLOSION
AIRCRAFT
VEHICLES VANDALISM AND MALICIOUS MISCHIEF
RIOT AND CIVIL COMMOTION
THEFT
*By law, the Texas FAIR Plan Association may not provide windstorm, hurricane and hail coverage for property located in the designated catastrophe area consisting of 14 coastal counties and a portion of Harris County on Galveston Bay. A policy written by the Texas FAIR Plan Association on such property must have a Windstorm, Hurricane and Hail Exclusion Agreement attached to the policy. Consumers in a designated catastrophe area may purchase windstorm, hurricane and hail insurance on insurable property through the Texas Windstorm Insurance Association.

Available Endorsements:
ENDORSEMENT # AND NAME HO-A TDP-1 CONDO TENANT
HO-140 - WINDSTORM, HURRICANE AND
HAIL EXCLUSION
HO-142 – EXCLUSION OF RESIDENTIAL
COMMUNITY PROPERTY CLAUSE
HO-205 - OFFICE, PRIVATE SCHOOL OR
STUDIO - SECTION II LIABILITY
HO-225 – ADDITIONAL PREMISES LIABILITY
COVERAGE
HO-301 - ADDITIONAL INSURED
HO-382 – CONDOMINIUM LOSS
ASSESSMENT COVERAGE
HO-400 LIMITED WATER DAMAGE
HO-401 LIMITED WATER DAMAGE
HO-800 - AMENDATORY MANDATORY
HO-801 - AMENDATORY MANDATORY
HO-802 - REPLACEMENT COST FOR
DWELLING
HO-803 - REPLACEMENT COST FOR
PERSONAL PROPERTY
HO-804 – REPLACEMENT COST COVERAGE
A (DWELLING), EXCEPT ROOF COVERINGS 􀀹
HO-806 - WINDSTORM, HURRICANE AND
HAIL EXCLUSION
HO-806B - WINDSTORM, HURRICANE AND
HAIL EXCLUSION
HO-809 – UNIT OWNERS RENTAL TO
OTHERS
HO-810 - SPECIFIED BUILDING OR ANIMAL
EXCLUSION
HO-811 - SPECIFIED ANIMAL EXCLUSION
TDP-001 - WINDSTORM, HURRICANE AND
HAIL EXCLUSION TDP-003 – EXCLUSION OF RESIDENTIAL
COMMUNITY PROPERTY CLAUSE 􀀹
TDP-017 – FAIR RENTAL VALUE 􀀹
TDP-800 - AMENDATORY MANDATORY 􀀹
TDP-810 - SPECIFIED BUILDING EXCLUSION 􀀹

Discounts:
• Home Security Devices Credit (must have certificate), not available on Texas
Dwelling Policy (TDP-1)
• Automatic Sprinkler Credit (must have certificate), not available on Texas
Dwelling Policy (TDP-1)
• Claims Free Discount (must have zero paid claims in the preceding five-year
period)
Payment Options:
• Annual Pay – Pay in Full
• Escrow Pay – Pay in full – Mortgagee Billed for Renewals
• **Semi-Annual – 50 Percent Due with Application; Balance Due in 180 Days
• **Four Payment Plan – 25 Percent Due with Application; Balance Due in Three
Equal Payments in 90-Day Intervals
**A $3.00 Service Charge is added to Each Payment

Revised 06/29/2007