TWIA insurance eligibility, read from the Insurance Code

Ask a coastal agent whether a house is eligible for the Texas Windstorm Insurance Association and the usual answer is a question back: has the work been certified? That instinct is right, and it comes from a specific place. Section 2210.258 of the Texas Insurance Code says, in terms, when the association may insure and when it may not.

The rule in one sentence

Subsection (a) requires that construction, alteration, remodeling, enlargement, and repair of, or addition to, any structure in the catastrophe area, begun on or after the effective date of the 2009 legislation it names, be performed in compliance with the applicable building code standards set out in the association's plan of operation.

Subsection (b) is the sentence that decides binding. Except as subsections (c) and (d) provide, the association may not insure such a structure until a certificate of compliance has been issued for it under section 2210.2515.

The trigger is the certificate itself. A booked inspection does not meet it, and neither does work that looks finished.

Which property the rule reaches

The rule attaches to the catastrophe area, which section 2210.003 defines as a municipality, county, or part of either designated by the commissioner. The same section names fourteen first tier coastal counties: Aransas, Brazoria, Calhoun, Cameron, Chambers, Galveston, Jefferson, Kenedy, Kleberg, Matagorda, Nueces, Refugio, San Patricio, and Willacy. How the designated area is drawn, including the part of Harris County it takes in, is set out on the catastrophe area page.

On the Coastal Bend that means the whole of Nueces, San Patricio, and Aransas counties sit on the regulated side of the windstorm eligibility line. Corpus Christi's own city limits run from the bluff downtown out onto Mustang and Padre Islands, so a single building department covers a bayfront renovation and a Gulf front new build, and the same subsection governs both.

What the certificate is evidence of

Section 2210.251(g) says a certificate of compliance issued by the department under section 2210.2515 demonstrates compliance with the applicable building code under the plan of operation, and then adds the sentence underwriters care about: the certificate is evidence of insurability of the structure by the association.

The issuer is the Texas Department of Insurance, not the contractor and not an engineer. A sealed letter from an engineer is a different document with a different author, and the difference is worked through on the page comparing an engineer letter with a windstorm certificate.

Exception one: a house the private market dropped

Subsection (c) lets the association insure a residential structure built, altered, remodeled, enlarged, repaired, or added to on or after June 19, 2009, that is not in compliance with the applicable standards, provided three things are all true.

• The structure had been insured on or after June 19, 2009, by an insurer in the private market that canceled or nonrenewed that coverage.
• The applicant gives the association proof of that cancellation or nonrenewal, for coverage issued to the applicant or to the previous insured.
• No construction, alteration, remodeling, enlargement, or repair of, or addition to, the structure occurred after the cancellation or nonrenewal and before the application to the association.

The third condition is the one that quietly fails. A homeowner whose carrier nonrenewed in the spring, who replaced a damaged section of roof over the summer and applied in the autumn, has done work inside the window the subsection closes. The exception is written for a house that stood still between losing private coverage and asking the association for it.

Exception two: thirty days on an inspection form

Subsection (d) allows a policy term of no more than 30 days for a structure that is otherwise insurable, where an inspection verification form or another inspection form adopted by the department has issued, while the applicant seeks the certificate. It is a bridge with a fixed length, and it is a department document that has to exist: an engineer's letter, a contractor's invoice or a city permit card is not an inspection form adopted by the department.

Thirty days goes quickly on a coastal job. The department's inspection process page says its inspectors try to inspect within 48 hours of the requested date, excluding weekends and holidays, and that non-compliant work gets a notice posted at the job and a reinspection after correction. A deficiency found late in the sequence spends days of a term that has already started. The subsection also does not say whether a second term may follow the first, and this page does not guess: that belongs to the association's own procedure.

What an agent can establish before binding

• Whether the address is inside the designated catastrophe area at all.
• Whether any work on the structure began after the 2009 legislation took effect, and if so whether a certificate has issued for that work.
• If the house was dropped by a private carrier, the date of the cancellation or nonrenewal, the proof of it, and whether anything was built or repaired since.
• If a certificate is still pending, whether a department inspection form has issued that would support the 30 day term.