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What is the Texas FAIR Plan Association and its purpose?
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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.
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Who is eligible to apply for coverage through the Texas FAIR Plan Association?
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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).
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What types of residential property insurance will the Texas FAIR Plan Association provide for eligible applicants?
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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.
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Can the Texas FAIR Plan Association refuse to insure an eligible applicant?
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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.
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What are some of the underwriting standards that may cause an eligible applicant to be denied coverage through the Texas FAIR Plan Association?
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An applicant may be denied coverage through the Texas FAIR Plan Association for any of the following reasons:
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• 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.
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Can you apply directly to the Texas FAIR Plan Association for coverage?
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No. You may apply for coverage only through an authorized agent of the Texas FAIR Plan Association. Insurance Plus is an authorized agent for the Texas Fair Plan Association.
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How long can I be insured with the Texas FAIR Plan Association?
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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.
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How do I file a claim on my Texas FAIR Plan Association policy?
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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.
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How are authorized agents of the Texas FAIR Plan compensated?
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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.
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What type of coverage will the Texas FAIR Plan Association provide for my dwelling and/or personal property?
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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.
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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.
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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.
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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.
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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.
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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.
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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.)
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The Homeowners, Condominium and Tenant policies also provide Liability, Medical Payments, and Loss of Use coverage:
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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.
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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.
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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.
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Coverage Limits – the following coverage limits are available, where applicable:
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• 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.
Insurance Plus Agencies of Texas is an authorized agent for Texas Fair Plan Association writing policies in Houston, TX, Harris county and surrounding areas. Texas Fair Plan is currently writing policies in Harris county with windstorm included.
Call 866-466-1699 for a quote today!
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