Have you ever considered what would happen if your insurance carrier couldn’t pay you? Or better yet, what happens when they go bankrupt? What happens if they leave Texas and won’t pay even though you’ve held up your end of the bargain as a policyholder? It can be a scary place to be. Fortunately, the Texas Property and Casualty Insurance Guaranty Association (TPCIGA) is there to help Texans stay protected even when the unthinkable becomes a reality.
The TPCIGA is a resource that is there to help protect you in the event you’re facing such scenarios, but thankfully, consumers have even more options, to begin with. This is to say that there are ways to help prevent facing a bankrupt company in the first place.
Freedom Insurance Group takes pride in helping Texans with more than 25 top-rated insurance carriers, but not everyone is so lucky. Our clients know that when they enroll, not only are they receiving the best price available, but also enjoy peace of mind from coverage backed by reliable companies. Learn how to protect yourself, what to look for in a carrier, and how the TPCIGA helps protect you in the worst-case scenario.
How the Texas Property and Casualty Insurance Guaranty Association Protects Texans
The Texas Property and Casualty Insurance Guaranty Association came to be in 1971 after being passed by legislation. Its purpose is to help Texans when covered property and casualty claims go unpaid due to the inability of their insurance carrier to pay.
As a nonprofit organization, it operates under the authority of the Texas Insurance Code Chapter 462 and the leadership of the Commissioner of Insurance of the State of Texas. The Commissioner is appointed by four public board members and five insurance industry-elected board members, which together create TPCIGA’s Board of Directors and policy-making body.
When an insurance carrier is insolvent, it means that there are too many liabilities for its assets to cover. Texans with property and casualty insurance, including auto insurance, home insurance, general liability, etc., are protected from facing this event alone thanks to the TPCIGA.
The TPCIGA is called upon after a court order is issued determining an insurance provider is insolvent and the Texas Commissioner of Insurance has also issued its order putting the carrier’s designation as an “impaired insurer.” Those eligible to receive their coverage must be a policyholder that is either a resident of Texas or has a claim dealing with permanent property that is found in The Lone Star State.
It’s easy to think that your coverage will always be there for you, but sadly, this is only what occurs in an ideal world. Over recent years, devastating weather events in both Florida and Louisiana have seen policyholders scrambling to find solutions for their unpaid claims as they attempt to rebuild after widespread losses.
You’ll find the Texas Property and Casualty Insurance Guaranty Association in Austin, Texas, working diligently to ensure that Texans facing such issues are taken care of and reimbursement is fulfilled.
Quick Facts About TPCIGA
The Texas Property and Casualty Insurance Guaranty Association provides a wide variety of services, benefits, and support for Texans. It’s understandable to have questions when dealing with such an organization. Here are some of the highlights of the TPCIGA with a focus on resources for drivers, homeowners, and business owners:
- The TPCIGA can be found at 9120 Burnet Road, Austin, TX 78758, and contacted at (512) 345-9335.
- All issues dealing with any annuity, disability, health, life, or disability insurance policies should be handled by the Texas Life, Accident, Health and Hospital Service Insurance Guaranty Association instead.
- The Texas Property and Casualty Insurance Guaranty Association works to contact anyone with an open claim on file with impaired carriers. Once these files are received, letters are mailed out to those affected detailing their rights as presented by the Guaranty Act. This process may take a month, but if you haven’t heard from them at this time, it’s important to contact the group.
- There are caps to this program, meaning you may not receive the full amount of your policy without taking other actions on your own. A $300,000 cap generally applies to your benefits. You’ll also need to use any other applicable forms of insurance before qualifying for TPCIGA benefits.
- If you have unearned premiums, you can receive up to $25,000 for your benefits.
- Texans involved in lawsuits involving related scenarios may be able to find support with the TPCIGA.
- The TPCIGA is there for business owners, but it’s important to note that caps also exist when it comes to commercial coverage. While the nonprofit is there for workers’ comp claims, there is a $50,000,000 cap and other forms of business insurance aren’t covered.
Ultimately, before canceling your policy or making any major decisions, it’s important to speak with a licensed insurance agent, possibly an attorney, and the TPCIGA itself to follow the counsel they provide.
How To Avoid Needing the TPCIGA
While it’s encouraging to know that the Texas Property and Casualty Insurance Guaranty Association is there for you, it’s always best to avoid needing them in the first place. Of course, there are no guarantees in life, but there are ways for Texans to help minimize their risks.
When Texans, or anyone for that matter, think of insurance, the cost is high on the list of considerations. Often, it’s the first consideration to be exact, but while this is important, it’s far from the only thing you should be mulling over.
Texans have options when it comes to enrolling with an insurance carrier. Ideally, the best company for you is going to provide the best coverage specific to your needs at the lowest price possible. But you’re also going to need to find a company capable of consistently doing so.
This can be a problem when there are widespread losses and claims being submitted. For example, after a hurricane, flood, or another large natural disaster. The Lone Star State has no shortage of harsh weather patterns and when companies that aren’t financially strong are left to fulfill financial obligations they can’t keep up with, it creates a problem for policyholders.
To avoid the need for the TPCIGA, you’re going to want to mitigate this risk, which is done by enrolling in companies that are financially sound. This can be determined fairly easily as there are five major independent rating agencies that judge the financial strength and ability of carriers to pay their claims.
Though they use slightly different ways of measuring, these trusted sources all have clear grading scales but in general, an “A-rated” insurance policy is going to provide you with the financial security and reassurance you’ll need from your insurance carrier.
Again, here at Freedom Insurance Group, we know firsthand how important this is and only partner with A-rated companies. Our clients receive the best coverage, top options, and many ways to save money.
Avoid the Texas Property and Casualty Insurance Guaranty Association With Top Carriers
The best-case scenario for anyone is to never face issues so large that the TPCIGA becomes necessary. But there are several things working against insurance carriers, meaning who you enroll with matters more now than ever. This includes the following factors:
- Changing and intensifying weather patterns are making related claims a problem for carriers.
- There are also economic issues complicating things. Like any other industry, the insurance industry is also dealing with inflation. This means it’s costing more to operate, including the ability to pay rising claim costs.
Keep in mind, there is virtually no area in Texas that doesn’t deal with some of the harshest weather in the United States. There is Flash Flood Alley, a Gulf Coast facing intense tropical