Texas Property & Casualty Insurance Statutes and Rules Pertinent Questions With Correct Answers

Property Insurance - Answer Usually covers a building, the contents of a building or both Casualty or Liability Insurance - Answer Provides compensation or indemnity for harm or wrong done to others that the insured is legally obligated to pay. Texas P&C Definition - Answer It is lawful for any insurance company doing business in Texas under the proper certificate of authority, except life insurance companies, to insure houses, buildings and all other kinds of property against loss or damage by fire: to take all kinds of insurance on goods, merchandise, or other property in the course of transportation, whether on land or water, or any vessel afloat, wherever the same may be; to lend money on bottomry or respondentia; to cause itself to be insured against any loss or risk it may have incurred in the course of its business. Approval of Rates and Forms - Answer All policy forms, endorsements and rates must be approved by the Commissioner and filed no more than 60 days before the date of delivery or use. After these 60 days, the filed form or endorsement is considered approved, unless otherwise disapproved by the Commissioner. Cancellation of Homeowner's Insurance in effect over 60 Days - Answer Failure of the Insured to pay the premium, increase in the hazard that is in control of the insured and would cause a premium increase on the policy, Insured submits a fraudulent claim and/or the Department discovers the continuation of this policy would violate the Insurance Code or any other law governing the business of insurance in this state Written Notice - Answer Insurer may cancel a policy my mail to the Insured at least 10 days before the effective date of cancellation 2 or more Claims - Answer An Insurer issuing standard fire, homeowners, and farm or ranchowners insurance policies may assess a premium surcharge at the time a policy is renewing if this amount of claims happened in the preceding policy year. Not losses from natural causes or that were filed and not paid by the Insurer Additional Premium Surchage - Answer If there is another claim made following the year of the 2 claims. The board will set the amount of any surcharge except that it cannot exceed 10% of the total premium 3 or more Claims - Answer Insurer can decline to renew policy if the insured has filed this many claims in the last 3 year period Liquidated Demand - Answer In case of total loss of insured property by fire, a fire insurance policy must be held and considered to be a ____________________ ____________________ against the company for the full amount of the policy. This regulation does not apply to personal property. Insurers are required to include this provision verbatim in each fire insurance policy issued on real property in Texas Actual Cash Value (ACV) Basis - Answer This is how all property losses are settled in Texas. Recovery may NOT exceed the smallest of the following 4 amounts: ACV of the property at the time of the loss, policy limit for the coverage, amount necessary to repair/replace the property, OR amount reflecting the insured's interest in the property at the time of loss Notice of Settlement of Claim under Casualty Insurance - Answer When a casualty insurer makes an offer to settle, the Insurer must notify the insured within 10 days. Once the claim is settled, the Insurer must notify the Insured within 30 days Residual Market - Answer Insurance markets or facilities designed to assume risks that are generally unacceptable to the normal insurance market Assigned Risk - Answer Plans would be considered a part of the residual market facilities Texas FAIR (Fair Access to Insurance Requirements) Plan Association - Answer Delivers residential property insurance to qualified citizens of Texas in areas determined by the Commissioner of Insurance to be under-deserved areas. The Association is governed by a Governing Committee composed of 11 voting members appointed by the Commissioner. FAIR governing committee - Answer Each member must be a member of the Association as a condition of its authority to transact residential property insurance in Texas. They do not only have to write policies underwritten by the Association. Maximum Limits of Liability by Association - Answer 1 million for dwelling and $500,000 for property contents. Association may not provide windstorm and hail insurance cover for risks that are eligible for that coverage under Catastrophe Property Insurance Pool Act Texas Windstorm Insurance Association (TWIA) - Answer Established to provide an adequate market for windstorm and hail insurance in designated areas, like the sea coast area of the state. Made up of all property insurers authorized to transact property insurance in the state. They can also issue fire and explosion insurance TWIA Insurable Property - Answer Immovable property at a fixed location in a catastrophe area or certain moveable property contained within Catastrophe Area - Answer Determined by the Commissioner that a city or county is subject to unusually frequent and severe damage from windstorm and hail and that windstorm and hail insurance is not reasonably available to a substantial number of property Catastrophe Eligibility - Answer All construction, alteration, remodeling, enlargement and repair, or addition to, any structure located in the catastrophic area must be performed in compliance with the applicable building code standards, as set forth in the plan of operation of the association. Property will be inspected and policies last 1 year Texas Required Limits of Liability - Answer All motor vehicles must have an automobile liability insurance policy that responds to damages in the amounts of the financial responsibility laws. Policy must cover bodily injury and property damage liability, UM & UIM coverage, and personal injury protection Financial Responsibility Law - Answer Motor Vehicle Safety Responsibility Law proves the ability to pay damages of: $30,000 due to bodily injury or death of any one person in one accident $60,000 due to bodily injury or death of 2 or more persons in any one accident $25,000 die to damage to property of others in any one accident Uninsured Vehicle Misdemeanor - Answer 1st offense - $175 to $350 2nd Offense - driver's license and registration suspended until having insurance for 2 years Other offenses - $350 to $1,000 Uninsured Vehicle Exemption - Answer Vehicles that are self-insured, covered by a bond (in the same amounts required for liability), or covered by a $55,000 cash deposit made to state treasurer or county judge where the vehicle is registered Texas Liability Insurance Card - Answer Must have: Name and address of Insured Year, make, and model of each covered vehicle Effective date and expiration date of policy Policy number Name of Insurer Name and phone number of agent, if applicable Statement that the policy provides the coverage required by the Texas Motor Vehicle Safety Responsibility Act