Texas’ property insurer of last resort for wind and hail in counties along the state’s coastline is temporarily reducing the amount of premium due in order to issue a policy and providing 75 days to pay the remaining premium.
The Texas Windstorm Insurance Association (TWIA) said its actions are in response to the COVID-19 crisis. The changes are effective immediately and will remain in place for all new business and renewals until we determine it is no longer necessary.
Any TWIA policyholder who is experiencing financial challenges due to the COVID-19 crisis can use this option. Interested policyholders and their agents do not have to notify TWIA if they are using this option.
TWIA outlined the details of the new payment options:
How this Temporary Payment Option Works
- Pay at least 25% of the full premium prior to the effective date to have a policy issued.
- No later than 75 days from the policy effective date, the remaining balance is due.
If the policyholder’s balance is not paid within the 75-day period, TWIA will issue a Notice of Cancellation (NOC) that states the policy will cancel if the delinquent balance is not paid by the end of the 15-day NOC period.
Invoices Will Still Show a 30-Day Due Date
The policyholder’s invoice will still show the due date as being 30 days from the effective date, but this notice may be disregarded. Payment will be due as described in “2.” above (see: How this Temporary Payment Option Works).
At this time, the 25% premium down payment cannot be paid by EFT or ACH. It must be paid by check or money order and mailed to TWIA. Payment must either be received by TWIA on or before the effective date of the policy, or mailed on or before the effective date of the policy using one of the following United States Postal Service (USPS) methods:
- USPS Registered Mail
- USPS Certified Mail
- USPS Priority Mail Express
- Regular mail that is hand-cancelled by USPS
TWIA is evaluating system changes that could enable this payment by EFT or ACH.
If a policyholder is considering the use of premium financing, they may want to discuss their options with those companies before taking any action. This includes policyholders who are interested in making the initial payment themselves and premium financing the balance; this option would be offered at the discretion of the premium financing company.
For TWIA to accept a premium finance agreement, it must first be signed by the policyholder.
Reinstating Policies Cancelled for Non-Payment
If a policy is cancelled for non-payment (of either the initial 25% minimum or the remaining balance) and the property owner wishes to reinstate their policy, it will be considered new business.
TWIA must receive at least 25% of the full policy premium in order to issue a policy and provide coverage. This applies to both new business and renewals.
Agents will continue to receive the full commission when a policy is issued under this temporary payment option (i.e. when the down payment is received).
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