Farmers Insurance by David Lorms Donates to LuLu M Stevens Elementary School

David Lorms, Farmers Insurance Agent, donated $500 to LuLu M. Stevens Elementary School to fund a Perfect Attendance program. Students with perfect attendance will be entered into a drawing for prizes to be awarded at the end of the semester. This is the 2nd year Mr. Lorms has funded this project. Pictured are Ashley Dusek, 2nd Grade Teacher, David Lorms, Farmers Insurance, and Lucy Anderson, Principal.

For more information, you can visit www.farmersagent.com/dlorms or call 713-688-8669.

World's Most Admired Companies by Fortune

Most Admired
Company Industry Overall score
1 Berkshire Hathaway 7.78
2 Travelers Cos. 6.49
3 Munich Re Group 6.44
4 Swiss Reinsurance 6.21
5 Allianz 6.20
6 Zurich Financial Services 6.13
7 State Farm Insurance 5.95
8 Liberty Mutual Insurance Group 5.93

Contenders
Company Industry Overall score
9 Allstate 5.91
10 Mitsui Sumitomo Insurance 5.71
11 Mapfre Group 5.40
12 Millea Holdings 5.38
13 Hartford Financial Services 5.31
14 Nationwide 5.30
15 Groupama 5.03
From the March 16, 2009 issue

State Farm® Net Worth Drops 16 Percent To $53.3 Billion

Nearly 90 Percent of Decline Due to Drop in Equity Values

$6.3 Billion In Catastrophe Losses Well Above Expected Levels

Bloomington, Ill., Feb. 27, 2009 -- Net worth for the State Farm group decreased in 2008 by $10.4 billion to end the year at $53.3 billion. The primary reason for the decrease was the $9.2 billion decline in the value of the property-casualty (P-C) companies’ unaffiliated stock portfolio (net of deferred tax). Although this decline was driven by general market conditions, State Farm’s P-C portfolio had a smaller percentage decline than the broader equity market.

The $10.4 billion decrease in net worth comes after five consecutive years of net worth increases. In spite of the 2008 decline, the State Farm group’s net worth is 68 percent higher than it was at the end of 2002, after two years of significant decline.

State Farm reported an after-tax net loss of $542 million in 2008, compared with $5.46 billion of net income in 2007. The after-tax net loss in 2008 was driven by the P-C companies’ pretax operating loss, which was partially offset by income tax recoveries. Extraordinary levels of catastrophe losses adversely impacted operating results in 2008.

The operating loss for State Farm follows five consecutive years of net income. The average annual amount of net income for State Farm through the first nine years of this decade is $1.6 billion.

“It is imperative in our business to achieve financial results that enable us to grow and maintain the necessary level of financial strength that ensures long-term sustainability. As a result, one should not attribute too much significance to short-term operating results without first considering the level of financial strength,” said Michael Tipsord, Vice Chairman, Treasurer and Chief Financial Officer. “This concept is as relevant to 2007 when State Farm achieved record levels of profit as it is to 2008 when we experienced significant losses. The more important message is that the positive results from 2003 through 2007 enabled State Farm to endure a record level decline in net worth during 2008 and still end the year with over $53 billion in net worth.”

The P-C companies reported a pretax operating loss of $2.1 billion in 2008, which includes the underwriting loss of $6.3 billion, partially offset by investment and other income of $4.2 billion. This compares with a pretax operating profit of $5.1 billion in 2007, which included investment and other income of $4.6 billion and an underwriting gain of $621 million. The State Farm group’s net worth is also affected by the results of operations of non-P-C affiliates, which resulted in a loss for the year of $244 million.

Total revenue, which includes premium revenue, earned investment income and realized capital gains (losses), was $61.3 billion for 2008 compared with the 2007 figure of $61.6 billion.

State Farm’s insurance operations consist of eight P-C insurers and three life insurers. The P-C insurers are primarily engaged in automobile, health, homeowners and commercial multiple peril (CMP) lines of business. The net results of State Farm Mutual Automobile Insurance Company, State Farm Indemnity Company, State Farm Guaranty Company and State Farm County Mutual Insurance Company of Texas include the Auto business as well as the Health and reinsurance lines written by State Farm Mutual. The net results of State Farm Fire and Casualty Company, State Farm Lloyds, State Farm General Insurance Company and State Farm Florida Insurance Company reflect the Homeowners, CMP and other P-C lines of business. State Farm Life Insurance Company, State Farm International Life Insurance Company Ltd. and State Farm Life and Accident Assurance Company write the Life and Annuity business. The State Farm group also provides banking products and mutual funds through affiliated companies. State Farm provides insurance and financial services products to nearly 81 million policies and accounts.

Auto – State Farm’s auto insurance business represents 63 percent of the P-C companies’ combined net written premium. Earned premium was $30.3 billion, an increase of 0.3 percent from 2007. The incurred claims and loss expenses were $25.6 billion. The underwriting loss was $2.7 billion.

Comparable 2007 figures were: earned premium, $30.2 billion; incurred claims and loss expenses, $24.4 billion; underwriting loss, $659 million.

Homeowners, CMP, Other – The net written premium for State Farm Fire and Casualty Company, State Farm Lloyds, State Farm General Insurance Company and State Farm Florida Insurance Company represents 33 percent of the P-C companies’ combined net written premium. Earned premium was $16.0 billion, an increase of 0.5 percent from 2007. The incurred claims and loss expenses were $15.1 billion. The result was an underwriting loss of $3.9 billion.
Comparable 2007 figures were: earned premium, $15.9 billion; incurred claims and loss expenses, $10.9 billion; underwriting gain, $462 million.

Health – The individual health insurance operations for State Farm Mutual reported an underwriting loss of $14 million. Net written premium was $744 million. Comparable figures for 2007 were: underwriting loss, $35 million; net written premium, $752 million.

Property-Casualty (P-C) – The combined underwriting loss was $6.3 billion on earned premium of $48.1 billion. This includes results from Auto, Homeowners, Health and other lines, as well as the reinsurance line provided by State Farm Mutual. These results, combined with investment and other income of $4.2 billion, resulted in a pretax operating loss of $2.1 billion. The after-tax net loss for the P-C companies was $673 million.

Comparable 2007 figures were: earned premium, $48.1 billion; underwriting gain, $621 million; investment and other income, $4.6 billion; auto policyholder dividends, $78 million; pretax operating profit, $5.1 billion; net income, $5.0 billion.

Life – State Farm’s life affiliates – State Farm Life Insurance Company, State Farm International Life Insurance Company Ltd. and State Farm Life and Accident Assurance Company – added $28 billion of total life insurance in force during the year, bringing the companies’ total insurance in force to $713 billion on Dec. 31, 2008.

The life affiliates reported premium income of $4.9 billion in 2008, compared with $4.0 billion in 2007. In 2008, after-tax net income was $185 million ($315 million when excluding $129 million in write-downs for impairment of invested assets). Net income was $410 million in 2007. Results for 2008 included $626 million in dividends to policyholders, compared with dividends of $608 million in 2007.
Bank – State Farm Bank®, F.S.B. increased total assets to $16.7 billion as of year-end 2008, compared with $15.9 billion at the end of 2007. The Bank reported an after-tax net loss of $159 million in 2008, compared with a 2007 loss of $18 million. The 2008 results were significantly impacted by a high provision for loan losses.

Mutual Funds – Total assets under management for the retail Mutual Fund operations at the end of 2008 were $3.5 billion, compared with $4.6 billion at the beginning of the year. State Farm VP Management Corp. and State Farm Investment Management Corp. reported a combined after-tax net loss of $21 million in 2008 compared with a loss of $7 million in 2007.

State Farm Bank, Bloomington, Illinois, is a Member FDIC and an Equal Housing Lender. Insurance and securities products offered by affiliated companies of State Farm Bank are not FDIC insured, are not guaranteed by State Farm Bank and are subject to investment risk, including possible loss of principal invested. (AP2009/02/2315)

It is important to note that there is market risk involved when investing in mutual funds, including possible loss of principal. State Farm VP Management Corp is a separate entity from those State Farm Entities which provide banking and insurance products.


State Farm Mutual Funds are available through prospectus by registered representatives of State Farm VP Management Corp., One State Farm Plaza, Bloomington, Illinois 61710, 1-800-447-4930. Please read the prospectus and consider the investment objectives, risks, charges and expenses and other information it contains about State Farm Mutual Funds carefully before investing.

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

Flood Insurance FAQ's

National Flood Insurance Program (NFIP) FAQs
Q. What is the difference between a flood insurance policy issued by the NFIP and a policy issued by an insurance company? Does one provide better coverage than the other?
A. Flood insurance is provided by the federal government through the NFIP. The policies that are sold by insurance companies are usually NFIP policies sold through the write your own (WYO) program. This is done to make it easier to purchase flood policies through local insurance agents. Even though the policies are purchased through the insurance companies, they are NFIP policies. Claims are handled by NFIP adjusters and by insurance company adjusters that are certified by the NFIP to handle flood claims. Questions and complaints can be referred to the NFIP at 1-888-225-5356. Some insurance companies may also offer flood coverage other than the NFIP policy. You should check with your agent or company to see if flood coverage other than the NFIP policy is available, and to compare the coverages being offered to determine the best coverage for your needs.

Q. How can I obtain insurance coverage to protect my home and contents from damage caused by flooding?
A. The NFIP makes flood insurance available to people who live in communities that participate in the NFIP. Contact your agent or the NFIP at 1-888-225-5356 to purchase a NFIP policy. The home need not be near a body of water or in a floodplain to qualify.

Q. Is flood insurance expensive?
A. The average flood insurance policy costs a little more than 400 a year for 100,000 of coverage. People in low risk areas can purchase flood insurance for just over 100 a year.

Q. Why would I buy flood insurance if my property is in a low or moderate risk area?
A. Twenty to 25 percent of all flood insurance claims come from low to moderate risk areas.

Q. Can I buy flood insurance if I rent?
A. You can buy up to 100,000 of flood insurance for your contents.

Q. How much flood insurance can I buy?
A. You can buy up to 250,000 for the dwelling and 100,000 for your contents.

Q. Does the policy provide any coverage for additional living expense?
A. No, the NFIP policy does not provide coverage for additional living expense.

Q. How is damaged residential property valued after a loss under an NFIP policy?
A. If the property is insured to at least 80 percent of its value and is your principle residence, the dwelling will be valued at replacement cost if the dwelling is replaced. If the dwelling is rebuilt at a new location, the replacement cost won't exceed what it would have cost to replace at the former location. Contents, appliances, carpets and carpet pads and outdoor property are valued at actual cash value. Actual cash value is the cost to repair with new material of like kind and quality less depreciation.

Q. Is there coverage for the cost of debris removal? What about loss avoidance measures?
A. The cost of removing debris on your property, and the cost of removing debris of your property that is on someone else's property is covered, but it's subject to the limit of the policy. You will be compensated at the Federal minimum wage if you perform the work yourself. Loss avoidance is limited to 1,000 for the cost of sandbags, temporary levees, pumps and plastic sheeting and lumber, including the value of your work. An additional 1,000 is available for the cost of moving insured property to protect it from flood. These benefits do not increase the limit of insurance.

Q. If my automobile was parked on my property and damaged by flood, does the flood policy cover the damage?
A. No, automobiles are not covered property under the NFIP policy. If you have comprehensive or full coverage under your auto policy, flood should be covered by that policy. If you have liability only, there is no coverage for the auto.

Q. Does flood insurance cover damage to built-in appliances?
A. Check to see what flood insurance coverage you have. Then, call the NFIP at 1-888-225-5356 to determine what would be covered in a flood insurance policy. Generally, flood policies provide coverage for the structure and personal property. Built-in appliances may fall under either category.

Q. What coverage is available for commercial buildings?
A. Up to 500,000 is available for non-residential buildings, and an additional 500,000 for contents of non-residential buildings. Buildings and contents are valued at actual cash value.

Q. When does coverage become effective under an NFIP policy?
A. There is a 30-day waiting period before coverage goes into effect after an NFIP policy is purchased. However, there is an exception to the 30-day waiting period when a new policy is initially purchased in connection with a loan. In that case, the policy becomes effective at the time of the loan closing.

Q. What if my dwelling or commercial building is valued over the maximum limits available?
A. The insurance company that insures your commercial building for fire might add excess flood coverage. That coverage usually has the NFIP maximum limits as a deductible. Availability might depend on the flood zone of each location. There may be insurers that will write excess policies for dwellings over the 250,000 maximum limits. You should contact your agent to learn more about available coverage.

Q. Where can I get more information about flood insurance?
A. Visit www.floodsmart.gov.

Home Owners Policy FAQs

Q: I have been temporarily displaced because my home was damaged by the hurricane. I'm concerned because I may have premium payments that are due since I left my home. Will my insurance company cancel or non-renew my homeowners and auto insurance policies for non-payment of my premium?
A: Commissioner's Bulletin No. B-0056-08 encourages insurers to suspend the collection of premium payments because of the possible relocation of hurricane victims and other personal hardships sustained by residents of the affected hurricane areas. Insurance companies are not expected to forgive payment of premium, but companies are expected to grant policyholders an extended grace period for the payment of any premium that may be due. The bulletin also encourages companies to work with policyholders in the collection of past due premiums.

You should contact your agent and/or company to determine if you owe any premium and whether the company will grant you an extended grace period.Q. I had to relocate temporarily due to the hurricane. Do I need to worry about my property coverage being in effect if a future loss occurs to my home while I'm temporarily displaced and unable to live in my home?
A: Some policies do not provide any dwelling coverage if the insured moves from the insured dwelling and a substantial part of the personal property is removed from the dwelling. Other policies only exclude certain perils such as vandalism or malicious mischief or the breakage of glass and safety glazing materials. However, Commissioner’s Bulletin No. B-0070-08 encourages insurers to suspend the application of any vacancy provision contained in insurance policies to allow continuing insurance coverage to those who are temporarily displaced because of damage to the insured structure as a result of the hurricane.
The suspension of the vacancy clause is not intended to apply to those who permanently move from their home to another location.
You should contact your agent and/or insurer to verify coverage under your policy and confirm that the insurer is not applying the vacancy provision in your situation.

Q. Can I make repairs to my property immediately?
A. Generally, you should make temporary repairs if necessary to protect your property from further damage. Do not make permanent repairs until an adjuster has inspected the damage. Your policy covers the cost of necessary temporary repairs, so save your receipts for materials and labor. You may wish to take pictures of the damage before making temporary repairs.

Q. Does a homeowners insurance policy provide additional living expense (ALE) coverage during a mandatory evacuation?
A. It depends on your particular policy. Some policies may provide coverage if a civil authority prohibits you from use of the residence premises as a result of direct damage to a neighboring premises caused by a covered peril. This coverage is generally limited for a period of up to two weeks. You should contact your agent or company regarding your specific policy.

Q. Does a homeowners insurance policy provide ALE coverage?
A. If you can´t remain in your home because of loss from "a covered peril," your homeowners or renters policy will pay for staying in a hotel, motel or other temporary shelter. However, payments are limited based on your specific policy provisions. If the damage does force you to move, be sure to tell your insurer where you are and how to reach you by phone. Also, you should leave a note at your damaged residence telling the insurance adjuster how to find you.

Q. When does my ALE begin to cover my expenses?
A. Generally, coverage for additional living expenses begins once a covered peril makes the residence premises wholly or partially untenantable/uninhabitable. You should contact your agent or company regarding your additional living expense coverage.

Q. Does my homeowners policy cover my detached garage or storage shed?
A. Coverage for other structures such as a detached garage or storage shed that are set apart from the dwelling by a clear space is generally the same as your insured dwelling. The total amount of coverage for other structures is usually 10 percent of the amount of insurance you have on your insured dwelling. Some policies may not provide coverage for other structures such as portable buildings or buildings that are used for business purposes. You should contact your agent or company regarding your specific policy.

Q. My home was not flooded by rising water; however, the sewer line backed up and caused damage in my home. Is this covered under my homeowners policy?
A. It depends on your policy. Some policies exclude water or sewage from outside the residence premises plumbing system that enters through sewers or drains. Contact your insurance company or agent regarding coverage.

Q. My house was flooded and I placed my furniture and household items in the front yard to dry out, but they were stolen. Will my homeowners policy cover this loss?
A. It depends on your policy. Even though there is an exclusion for flood losses, many policies contain an exception to that exclusion such as "We do cover an ensuing loss by theft or attempted theft or any act of stealing." Contact your insurance company or agent regarding coverage.

Q. My policy states that if a claim results from a weather-related catastrophe or a major natural disaster, each claim-handling deadline is extended for an additional 15 days. Does this mean that I have coverage under my policy for damage caused by the flood?
A. This language does not alter or amend what is covered by the policy. It merely extends the time requirements of the Texas Insurance Code.

Q. Under a homeowners policy, who determines the cause of damage and who pays for an expert if one is needed?
A. The insurance company usually determines the cause of damage as its adjusters investigate and evaluate the loss. If an expert is required to determine the cause of the loss, the cost is usually borne by the insurance company, but in some cases may be paid by the insured.

Q. My house got water in it from the flood. I had damage to the roof and the roof is sagging and rain water came in through the roof. I don´t have flood insurance, but I do have homeowner´s insurance. What, if anything, may be covered under my homeowner´s policy?
A. If a covered peril such as wind or lightning caused damage to the roof and created an opening, then water damage to your home and personal property resulting from rain water coming through that opening may be covered under the standard homeowners policy.

Q. I´ve received a check from the insurance company, but am not satisfied with the amount. I plan to file a complaint to request additional funds be paid. Should I cash the check? If I cash the check, does it mean that I accept their decision and amount of payment?
A. Be careful about endorsing a check before discussing it with the company. Call the adjuster or company first before cashing the check. Some companies have a release from further liability disclaimer printed on the back of the check. The check may be a partial payment to initiate repairs. Additional funds may be released when you submit proof that repairs have been completed.

Q. How does replacement cost coverage work on policy types such as flood, homeowners, dwelling, and mobile home?
A. Replacement cost coverage replaces/repairs your damaged dwelling or personal property with new material and/or items of like kind and quality. In most cases, you should only be responsible for paying the deductible. Some homeowners and dwelling policies automatically include replacement cost coverage for the dwelling; others may be endorsed for an additional premium; and some may only provide actual cash value. Companies may also offer replacement cost coverage for mobile home policies. You should check with your agent or company to see if your company offers replacement cost coverage on your policy.

Q. I've received a check from my company for damages to my home. It is going to cost more to repair than the amount received. Did they pay me enough for damages?
A. If you have replacement cost coverage, your claim may be paid in two stages. Your first claim check may be for the actual cash value (ACV) of the damaged property. ACV is determined by taking the replacement cost for the covered loss and deducting for depreciation. Once the damaged property is repaired or replaced, you are entitled to receive the depreciation that was previously withheld in your first check up to the replacement cost of the damaged property and not to exceed the actual amount spent or the total amount of insurance on the dwelling. Generally, in order to receive the difference between ACV and replacement cost, the policy contract requires that the repair or replacement be completed within a specific period of time, usually 180 to 365 days from the date of loss. Policies may also provide an option for the insured to extend that time frame if requested in writing as outlined in the actual policy. It is important to check your policy and/or contact your agent regarding the specific requirements of your policy.
If you are not underinsured, you should only be responsible for paying your deductible in most cases. If you believe your company is not offering an amount sufficient to repair/replace your damaged property, minus your deductible, you may want to request appraisal in accordance with the provisions in the policy. Have your company explain the basis for its payment and clarify if additional funds are forthcoming.

Q. What´s the difference between the different types of homeowner policies? How does a dwelling policy differ from a homeowners policy?
A. Homeowners policies may either provide "all risk" or "named peril" coverage. All risk is used to describe policies that typically cover all perils unless specifically excluded in the policy. Named peril means the damage must be caused by a peril that is specifically named or listed in the policy. The homeowners policy provides coverage for the dwelling, personal property, and personal liability. A dwelling policy provides coverage for the dwelling and/or personal property.

Q. Do checks from insurance companies have to be endorsed by both the insured and the mortgage company? Does the same procedure apply to mobile homes?
A. Insurance claims payments for damage to property that is security for a loan must be made payable to the policyholder and the mortgage company, so they would require endorsements from both parties.

Q. What recourse does the insured have if the check was issued directly to the mortgage company? How long can a mortgage company hold money before releasing any to the insured? Can the mortgage company disperse the money in small increments? Can they withhold disbursements?
A. Your insurance company cannot make a check for a claim payable only to the mortgage company. If they do, you should refuse to accept it and demand the check be re-issued to you and your mortgage company.The Texas Insurance Code provides that the mortgage company must, within 10 days after they receive the insurance proceeds, tell you what their requirements are in order to have the funds released. Once you have provided sufficient evidence to show that you have met those requirements, the mortgage company has 10 days to release the funds.

Q. Are plumbing problems/backed up toilets covered by any types of insurance, even after a flood?
A. Some homeowners policies provide coverage for accidental discharge, leakage or overflow from within a plumbing system and if rising flood waters cause toilets to overflow, the loss may be covered. Contact your insurance company or agent regarding coverage.

Q. There is a power outage in my area and we have no utilities in our home. Will my policy pay for a hotel until power is restored?
A. Probably not. The policy will normally only provide loss of use coverage if your home is damaged by a peril covered in your policy and, as a result of the covered damage the residence premises is untenantable or unfit to live in. You must check the specific language in your insurance policy.

Q. I bought my house several years ago and last year my mortgage was bought by another mortgage company. My original company provided flood insurance, but now I find that the new mortgage company did not provide it. What can I do?
A. Mortgage companies are required by statute to ensure that a property in a flood zone has flood insurance. A mortgage company must provide notice to the borrower of the requirement of flood insurance. If the borrower fails to purchase flood insurance, then a mortgage company may purchase flood insurance for the property. For information regarding the statute, contact the Federal Emergency Management Association (FEMA) representative at a Disaster Recovery Center (DRC) or the NFIP. Remember that it is important as a homeowner to ensure that all necessary insurance coverage is in place.
If you have a concern about a private mortgage lender, you should contact the Federal Trade Commission (FTC) at 214-767-5501 or 5503. You may also reach the FTC at www.ftc.gov.
If the lender is a state-chartered savings and loan, or bank, contact the Texas Savings and Loan Department at 512-475-1350.
If the lender is a Federal Chartered Lender, contact the Office of Thrift Supervision at 972-281-2000.
In some instances, the U.S. Department of Housing and Urban Development (HUD) can help. Call HUD at 1-800-669-9773.

Q. Wind caused my tree to fall on my house, which caused damage to my roof. Does my homeowners policy cover the damage to my house and pay for the removal of the tree from my property?
A. If your policy provides coverage for wind, the roof damage caused by the tree is covered. Homeowners policies will not pay for the tree itself; however, most policies pay to remove a tree if a covered peril caused it to fall on and damage covered property. Some policies limit the coverage for removal to 500 per tree and 1,000 per loss. Contact your insurance company or agent regarding coverage.

Q. My neighbor´s tree fell down on my house and damaged my roof. Will my neighbor´s homeowners policy pay for the damage to my home and remove the tree?
A. Probably not. Your neighbor is not legally liable for an act of nature. However, if the tree was dead, your neighbor may be responsible for the damage to your home. If your neighbor´s policy does not pay for your damage, you can make a claim under your policy if the peril that caused the tree to fall is a covered peril in your policy. You should contact your agent and/or company regarding the damage.

Q. Some trees blew down in my yard during a storm. Will my homeowners insurance policy pay for the loss to and removal of the trees?
A. No. Wind is not a covered peril for trees, shrubs, plants and lawns. Removal of the trees is not covered either since they did not fall on or damage covered property.

Q. A windstorm blew my fence down. Will my homeowners insurance cover loss of my fence?
A. If your policy provides coverage for wind, you may have coverage for the fence. Coverage for fences is usually limited to actual cash value which is the replacement cost for the damaged property less depreciation. Some policies do not provide any coverage for fences damaged by wind. You should check your policy and/or contact your agent regarding coverage.

Q. Who should I contact if I have damage to my home as a result of a windstorm and my windstorm insurance is provided through the Texas Windstorm Insurance Association (TWIA)?
A. For questions on policy coverage or filing a claim on your TWIA policy, please contact your insurance agent or contact the TWIA at 1-800-788-8247 or on its website at www.twia.org.
For questions regarding inspections of your property for certification to the Windstorm Building Code, please contact the TDI Windstorm Inspection unit at 1-800-248-6032 or refer to its website at www.tdi.state.tx.us and click on "More Windstorm Info."

Q. During the storm, a tree fell on the roof of my home which allowed rain to enter from the opening made by the tree. I now see mold growing. Do I have coverage?
A. Most homeowners policies will provide coverage for the property damaged by rain that entered through an opening caused as a direct result of wind. Generally, mold is excluded in the homeowners policy; however, some policies will cover an ensuing mold loss caused by or resulting from covered water damage. Coverage for ensuing mold loss would include the reasonable and necessary costs to repair or replace your damaged property. Most policies do not include any additional cost for remediation or testing of ensuing mold unless your policy includes mold remediation coverage.

Q. During the storm, my home was flooded. Does my homeowners policy cover mold damage from the flood water?
A. Typically, homeowners policies do not cover damage caused by or resulting from flood, surface water, waves, tidal water or tidal waves, overflow of streams or other bodies of water or spray from any of these whether or not driven by wind. If there is no flood coverage provided in the homeowners policy, any ensuing mold loss resulting from flood would not be covered under the policy.

Q. Do I have to hire a public insurance adjuster to file and help in the settlement of my auto or homeowner's insurance claim?
A. No. Hiring a public insurance adjuster to assist you in filing a property insurance claim is optional. Public insurance adjusters charge fees to help negotiate claim settlements with insurance companies. Be aware that the public insurance adjuster fee is normally a percentage of the claim settlement and therefore is paid out of settlement monies received from an insurer.

Q. Are there any limitations on the compensation of a public insurance adjuster?
A. Yes, the following limitations apply:
If a claim is settled within 72 hours of the date the loss is reported to the insurance company, the public insurance adjuster is entitled only to reasonable compensation for time and expenses.
The public insurance adjuster's fee may not exceed 10 percent of a claim settlement and must be disclosed in the public insurance adjuster written contract.

Q. Is a public insurance adjuster permitted to be involved in the repair of damaged property for which the public adjuster negotiated settlement?
A. No. The public insurance adjuster may not participate, either directly or indirectly, in the reconstruction or repair of damaged property that is the subject of a claim adjusted by the public insurance adjuster.

Q. Are public insurance adjusters required to be licensed by the Texas Department of Insurance?
A. Yes, a person may not act as a public insurance adjuster in this state or hold himself or herself out to be a public insurance adjuster in this state, unless the person holds a license or certificate issued by the commissioner. You may verify the license status of a public insurance adjuster at www.texasonline.state.tx.us/NASApp/tdi/TdiARManager.

Q. The food in my refrigerator spoiled because of loss of power in my area. Will my homeowners policy pay for the loss?
A. Most homeowners policies will provide up to 500.00 for spoilage of refrigerated or frozen food caused by an off premises power failure, if the power failure is a direct result from peril covered in your policy. If the power failure is a result of physical damage to the dwelling or any equipment contained in the dwelling and is caused by a peril covered in your policy coverage is not limited to 500. Other policies may not provide the 500 for a loss resulting from a power failure off premises unless added by an endorsement.

Q. If I evacuate due to a storm, and my personal property is damaged or stolen while in another location, will my personal property be covered by my auto or homeowners policy?
A. Homeowners policies provide coverage for personal property while away from the insured location or premises. Most policies limit the amount of this coverage to either 10 or 20 percent of the total amount of coverage for personal property. Some policies limit theft coverage for personal property while away from the residence premises at any other residence owned by, rented or occupied by an insured, unless the insured is temporarily living there. Generally, a personal automobile policy will not cover personal property.

Q. Can my insurance company increase my homeowners insurance premium because I filed a claim for hurricane damage?
A. No. State law and regulation prohibits an insurer from increasing homeowners insurance premium because of a claim or claims that are a result of a loss caused by natural causes.

Auto Insurance FAQ

Auto FAQs
Q: I have been temporarily displaced because my home was damaged by the hurricane. I'm concerned because I may have premium payments that are due since I left my home. Will my insurance company cancel or non-renew my homeowners and auto insurance policies for non-payment of my premium?A: Commissioner's Bulletin No. B-0056-08 encourages insurers to suspend the collection of premium payments because of the possible relocation of hurricane victims and other personal hardships sustained by residents of the affected hurricane areas. Insurance companies are not expected to forgive payment of premium, but companies are expected to grant policyholders an extended grace period for the payment of any premium that may be due. The bulletin also encourages companies to work with policyholders in the collection of past due premiums.
You should contact your agent and/or company to determine if you owe any premium and whether the company will grant you an extended grace period.

Q. My car was flooded. How do you determine if your car should be totaled?A. Whether your car will be totaled is determined on a case-by-case basis like any other loss. Normally, when the cost of repair plus the salvage value equals or exceeds the actual cash value of the vehicle prior to the loss, it will be considered a total. A primary factor is the amount of water in your car. Generally, if water covered your dashboard or electrical components, the car will be totaled.

Q. My car was totaled due to flood damage and I have full coverage on it. The company is going to pay the Blue Book value but I still owe substantially more than that. Doesn´t the company have to pay what I owe on the auto?A. No. The company is only obligated to pay the current market value of your vehicle. You can request that the adjuster explain to you how the value was derived to ensure that all of the vehicle´s equipment, features, upgrades and recent work was considered in determining the value. To cover the difference between the market value of your vehicle and what you actually owe, you would need an endorsement or separate policy, to provide guaranteed auto protection (GAP) coverage.

Q. What will happen to the vehicle´s title if my car is totaled?A. If you own the vehicle outright, you will have to sign the title over to the insurance company. In exchange, they will give you a check for the market value of the vehicle. If you still owe on a car loan, the insurance company will coordinate with you and your lender to have the title signed over to them. In most cases, the insurance company will establish contact with the lender and be advised of the amount owed on the loan. If the insurance company has determined that the market value of the vehicle is 10,000 and the amount owed the lender is 8,000, the insurance company will issue a check for 8,000 to the lender to release the lien on the car. The insurance company will then issue a 2,000 check to you to obtain your signature on the title.

Q. The insurance company requested that I tow my flooded vehicle to a specific location for inspection. Am I responsible for the towing charges?A. No. The insurance company should pay the towing expense by reimbursing you or paying the tow truck operator once the vehicle is delivered at the inspection site. You should not be responsible for the expense since you are assisting the insurance company in a prompt inspection of your vehicle, as well as protecting it from further damage.

Q. The insurance company agreed to repair my vehicle. Can the company require the use of used parts?A. In some cases, used parts and after market parts may be permissible, depending on the age, condition, and mileage of the particular vehicle. Most Texas personal automobile policies require the insurance company to pay the lesser of the following: actual cash value of the property; the amount to repair or replace the property with other of like, kind, and quality; or the amount stated in the declarations page of the policy.

Q. Since my car was flooded, I had to rent a vehicle. Does my auto policy cover the cost of renting a car?A. Your policy will provide coverage for renting another vehicle only if you have an endorsement on your policy for rental reimbursement coverage. Under this coverage, the insurance company will pay up to the limit shown on the endorsement for the reasonable amount of time it takes to repair or replace your vehicle.

Q. Is my vehicle covered for flood damage?A. Only if you carry other than collision coverage, also called comprehensive coverage, on your policy. This information can be found on your policy´s declarations page. If you do not have a copy of your policy, you may wish to check with your agent or company.

Q. What if I do not agree with the settlement offered by the insurance company, particularly the market value amount for my totaled vehicle?A. Ask the adjuster to explain how the settlement amount was derived. If you still disagree, the personal auto policy allows you to demand an appraisal of the loss. There is a specific provision in the policy for appraisal which lists the responsibility of both parties.

Q. My car was washed away in the flood. How do I find out where it is now?A. Contact the Unclaimed Autos department of the area police department. Also, your vehicle may have been towed to a storage facility without your consent. If the vehicle was towed without your consent, and the storage facility wants to charge you a fee, you might contact the Texas Department of Transportation (TxDOT) at 1-800-285-6997 (general information line).

Q. I´ve received a check from the insurance company, but am not satisfied with the amount. I plan to file a complaint to request additional funds be paid. Should I cash the check? If I cash the check, does it mean that I accept their decision and amount of payment?A. Be careful about endorsing a check before discussing your concerns with the company. Call the adjuster or company first before cashing the check. Some companies have a release from further liability disclaimer printed on the back of the check.

Q. How does replacement cost coverage work?A. Replacement cost coverage replaces or repairs your damaged property with new material and/or items of like kind and quality.

Q. Is replacement cost coverage available on all policy types?A. Replacement cost coverage is not available under a typical auto policy. Some insurers provide new car replacement for a limited number of years if the auto is insured when new. You should check with your agent or company to see if they offer replacement cost coverage on all policy types.

Q. If an insured vehicle is financed, how are claim checks issued? If issued to both insured and lien holder, how does insured collect?A. The loss payee endorsement requires the insurer to pay to the insured and the loss payee as their interest may appear. The insured and the loss payee may both be named on the check. The insured and the loss payee will agree on the release of funds.

Q. What is the insured´s recourse if the check made payable jointly to the lien holder and insured is sent directly to the lien holder and cashed without the insured´s knowledge or endorsement on the check?A. That is a legal question that the Texas Department of Insurance (TDI) cannot answer. However, your first step would be to contact the insurer and your lien holder. You can also contact the Texas Department of Banking at 1-877-276-5554 or visit its website at www.banking.state.tx.us.

Q. What determines if a flooded vehicle should be totaled?A. It is determined the same as any other loss. Normally, when the cost of repair plus the salvage value equals or exceeds the actual cash value of the vehicle prior to the loss, it will be considered a total loss.

Q. Does the insured have to agree to have their vehicle totaled if they will be "upside down" on their loan?A. The policy contract states how the loss will be paid and it is the insurance company that decides whether or not to total a car. If the cost to repair exceeds the actual cash value, the company will pay the actual cash value of the vehicle. The insured and the insurance company may negotiate the settlement in which the insured may retain the salvaged vehicle; however the insured would be responsible for the cost of repairs at that point. Insurance coverage for the difference between the actual cash value of a vehicle and the outstanding loan amount can be covered by a GAP endorsement or a separate GAP policy.

Q. Describe how the title on an insured vehicle is processed if the vehicle is determined to be a total loss from flood damage or from collision damage.A. For information about how titles are processed, please contact TxDOT at 512-465-7611.