What it means
The Texas Department of Insurance says windstorm insurance pays to repair or rebuild a house damaged by hail or wind from a tornado, thunderstorm or hurricane. It adds that some people call it hurricane insurance.
This entry uses Texas as one example, and other places differ. How the cover is obtained depends on location.
In Texas, away from the coast, a homeowners policy probably includes wind and hail cover and pays for that damage much as it pays for fire, lightning or theft. The homeowner may have a different deductible for windstorm damage.
Along the coast, TDI says homeowners insurance might not cover wind and hail damage, so the owner then needs a separate windstorm policy, and many people buy one from the Texas Windstorm Insurance Association, known as TWIA. TDI's comparison chart says most home policies on the coast do not cover wind and hail, and most home policies do not cover floods.
Windstorm insurance is not required by law in Texas, but TDI says a coastal owner with a mortgage will likely be required by the lender to carry it. To get a TWIA policy in Texas, an owner must live or own a business in the TWIA service area.
The owner must also have asked an insurance company for wind and hail cover and been turned down. The home or business must have an inspection and a certificate showing it was built or renovated to certain construction codes.
TDI also warns not to wait, because a TWIA policy cannot be bought when a hurricane is in the Gulf of Mexico. An owner has one year from the storm to file a TWIA claim, and 60 days after acceptance to dispute the amount.
Wind cover is not flood cover. The NAIC says flood or storm surge damage is covered only if a separate flood policy was bought.
A policy may also apply a hurricane or named storm deductible, usually a percentage of insured value, so the policy wording and any state rules should be read before a storm.
In practice
Real-world examples.
Example
A fictional owner lives inland in Texas. Her homeowners policy covers wind and hail much like fire or theft, but a separate deductible applies to windstorm damage. A hailstorm dents her roof, and she files a claim under the homeowners policy.
Example
A fictional owner lives on the Texas coast with a mortgage. His homeowners policy does not cover wind and hail, so he buys a TWIA policy through his agent. His lender will likely require the cover, since the TDI page says so for coastal owners with a mortgage.
Example
A fictional owner waits until a hurricane enters the Gulf of Mexico to apply for TWIA cover. TDI says a policy cannot be bought at that point.
Formula
Calculation
Insurer payment = covered loss - deductible, when the loss is higher than the deductible. A percentage deductible = deductible rate x insured value.
Worked example with assumed figures. A fictional house has $300,000 of insured value and a wind and hail deductible of 2%, so the deductible is 0.02 x $300,000 = $6,000. A wind loss of $25,000 leaves the owner paying $6,000 and the insurer paying $25,000 - $6,000 = $19,000, subject to the policy limit and terms. A smaller loss of $5,000 would fall entirely below the deductible, so the insurer would pay $0.Case study
Seen in the real world.
Fictional and illustrative. A couple buys a house near a coast and sees that their homeowners quote lists wind and hail as excluded. Their lender will not close without wind cover. They ask an insurance company for it and are turned down, which is a step TDI lists for a TWIA policy.
They get the inspection and certificate TDI lists, then buy a TWIA policy through their agent and a separate flood policy, since the homeowners and wind policies do not cover rising water. The lender accepts the three policies at closing. When a storm later damages the roof, they file within the one year allowed. They dispute the claim amount within 60 days of acceptance and ask for an appraisal.
Watch out
Common mistakes.
- Assuming a homeowners policy covers wind and hail everywhere, when TDI says coastal policies might not.
- Waiting until a storm is forecast to buy cover, since a TWIA policy cannot be bought while a hurricane is in the Gulf of Mexico.
- Assuming wind cover pays for flood or storm surge, when the NAIC says a separate flood policy is needed.
Questions
People also ask.
What does windstorm insurance cover?
It pays to repair or rebuild a house damaged by wind or hail from a tornado, thunderstorm or hurricane, according to the Texas Department of Insurance.
Do I need it if I live on the coast?
Windstorm cover is not required by law in Texas, but a lender will likely require it for a coastal owner with a mortgage.
Does it cover flooding?
No. Flood or storm surge damage needs a separate flood policy, the NAIC says.
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