Texas Personal Lines Insurance Overview

These flashcards cover key terms and concepts related to Texas personal lines insurance, including definitions of various types of insurance, regulatory requirements, and key rules.

Property Insurance

Covers physical property, such as buildings and contents, against loss or damage due to various risks.

Casualty (Liability) Insurance

Provides compensation for harm or damage the insured is legally responsible for, whether imposed by law or assumed by contract.

Approval of Rates and Forms

All policy forms, endorsements, and rates must be approved by the Texas Commissioner of Insurance before use.

Nonrenewal Rules

Insurers may decline renewal if an insured has filed 3 or more claims in 3 years.

Liquidated Demand Rule (Fire Insurance)

If total fire loss occurs on insured real property, the insurance company must pay the full policy amount.

Actual Cash Value (ACV)

The payout for property losses is settled on an Actual Cash Value basis, representing the value at the time of loss.

Texas FAIR Plan Association

Provides residential property insurance to Texans in underserved areas where standard insurance is unavailable.

Texas Windstorm Insurance Association (TWIA)

Provides windstorm and hail insurance in high-risk coastal areas where private insurers do not offer coverage.

Texas Motor Vehicle Safety Responsibility Act

Requires drivers to carry an active auto liability insurance policy that meets the state's financial responsibility requirements.

Personal Injury Protection (PIP)

Automatically included in all auto policies unless rejected; covers medical expenses and lost income due to accident-related injuries.

Uninsured & Underinsured Motorist Coverage (UM/UIM)

Protects against accidents caused by uninsured or underinsured drivers.

Texas Property and Casualty Insurance Guaranty Association

Created to protect policyholders and claimants from financial loss if their insurance company becomes insolvent.

Exclusions (TPCIGA)

The Association does not cover life, annuity, health, disability insurance, or certain other insurance types.

Claim Limits for Workers' Compensation

The Texas Property and Casualty Insurance Guaranty Association pays the full amount of the claim without a cap.