Texas FAIR Plan and Texas Windstorm Insurance Association homeowners insurance

Overview

The Texas FAIR Plan Association (TFPA) and the Texas Windstorm Insurance Association (TWIA) make up Texas' residual market, the insurers of last resort for homes private companies will not write. They are separate entities under separate chapters of the Texas Insurance Code (2211 and 2210), but TWIA administers the FAIR Plan, they share an Austin office, and the NAIC reports them as one group. They do different jobs:

• The Texas FAIR Plan sells limited homeowners, dwelling, condo and tenant policies anywhere in Texas to people turned down by at least two insurers.
• TWIA sells wind and hail coverage only in the 14 first-tier coastal counties and part of Harris County.

The group ranked #86 among U.S. homeowners insurance groups by 2025 direct premiums written, with $220.0 million (0.12% of the national market), according to NAIC market share data. That is essentially the FAIR Plan's homeowners book; TWIA's wind-only policies fall outside the homeowners line, though TWIA is the larger operation. On June 30, 2026 TWIA had 288,676 policies and $128.3 billion of insured value, and it wrote about $700 million of residential premium in 2025, according to the Texas Department of Insurance (TDI). The FAIR Plan insured 118,486 properties worth about $37.1 billion.

Neither is a state agency or receives state general revenue. When storm losses outrun premiums and reserves, the shortfall moves to Texas insurers and, through surcharges, to Texas property owners.

History

The Legislature created TWIA in 1971, after Hurricane Celia hit Corpus Christi in 1970; until 1997 it was the Texas Catastrophe Property Insurance Association. Hurricane Ike (2008) produced 93,064 TWIA claims and $2.6 billion in losses and adjustment expense, Harvey (2017) 71,565 claims and $1.7 billion, and Beryl (July 2024) more than 32,000 claims and an estimated $545 million. TWIA assessed member insurers $430 million after Ike and $372 million after Harvey. Beryl drained its Catastrophe Reserve Trust Fund: TWIA withdrew $462.7 million in March 2025, leaving about $57.2 million on June 30, 2026.

The FAIR Plan's statutory authority dates to 1995; TDI activated it statewide in 2002, during the Texas mold crisis, when insurers sharply cut back on homeowners policies. It shrank to 61,452 policies in 2022, then more than doubled to 127,835 by the end of 2025 as private carriers tightened underwriting. It assessed its members $54.9 million in 2018 after Harvey, $17.7 million in 2024 for a 2023 deficit from spring storms, and $60.1 million in 2025 for Beryl.

House Bill 3689 (2025) rewrote TWIA's funding for losses after December 31, 2025: state loans of up to $1 billion a year, repaid by a catastrophe surcharge on most property policies statewide, then up to $1 billion of member assessments that insurers cannot pass on. The required funding level dropped from a 1-in-100-year to a 1-in-50-year probable maximum loss. TWIA says it has $4.3 billion available for the 2026 hurricane season.

Homeowners coverage

Texas FAIR Plan. Coverage is named-perils only: fire and lightning, sudden and accidental damage from smoke, windstorm and hail, explosion, aircraft and vehicles, vandalism, riot and theft (not on dwelling policies). The association says it is not as comprehensive as voluntary-market coverage. Buildings and contents settle at actual cash value; a Homeowners policy can add replacement cost on the dwelling if you insure it to 100% of replacement cost, and a home insured below 80% may be paid only in part. The Dwelling (fire and extended coverage) policy has no replacement cost option and no liability.

Limits: dwelling up to $1,000,000, other structures 10%, contents 50% of the dwelling on a Homeowners policy (60% or 70% for extra premium) and up to $500,000 on condo and tenant policies, loss of use 10%, liability of $100,000 or $300,000. Inside TWIA's territory the FAIR Plan must exclude wind and hail. From July 1, 2026 its wind and hail deductibles run 2% to 5% (the 1% option is gone, and existing 1% policies move to 2% at renewal); all-other-perils deductibles run 1% to 5%. On a $300,000 dwelling limit, a 2% deductible means the first $6,000 of a hail claim is yours.

TWIA. A TWIA policy covers direct wind and hail damage and nothing else: no fire, no theft and no flood or storm surge, which belong with the National Flood Insurance Program. Homes in V zones built or substantially altered on or after September 1, 2009 must show flood coverage, and buildings need a windstorm certificate of compliance (WPI-8, WPI-8-E or WPI-8-C), with limited exceptions. Maximum limits from January 1, 2026 are $1,773,000 for a dwelling and its contents, $374,000 for contents in a condo unit and $119,000 for a manufactured home. Residential deductibles are $100, $250 or 1%, with optional 1.5% to 5%. Dwelling limits rise automatically at renewal with building costs, by about 3% at TWIA and 4% at the FAIR Plan for renewals from September 1, 2026.

Discounts and savings

TWIA credits homes built to its windstorm building codes by 19% to 33%, depending on location and the code met, gives retrofit credits for older homes fitted with qualifying opening protection, and credits roofs labeled UL 2218 Class 1 to 4. Larger deductibles also earn credits. Both associations offer installment plans; since January 1, 2026 TWIA premiums can no longer be financed through premium finance companies. The FAIR Plan charges $5 per installment.

Where it sells and recent market moves

The FAIR Plan writes statewide, but Harris County alone held 58,464 of its policies in mid-2026. TWIA writes only in the coastal counties from Jefferson to Cameron and the Harris County cities east of Highway 146; TDI data show its share of residential wind coverage there rising from 47% in 2023 to 55% in 2025. TWIA's media kit puts the average residential premium at $2,541.

The FAIR Plan raised homeowners rates 9.3% and dwelling fire rates 25% on August 1, 2025, then cut homeowners rates an average 2.6% (21.6% in the Seacoast Tier 1 territory), condo rates 7.5% and tenant rates 25% from September 1, 2026, while dwelling extended coverage rose 21.6%. TWIA's last increase was 5% in January 2022; TDI disapproved a 10% request in 2024, and on August 4, 2026 the board voted to file no change for 2027. Both associations stop taking new applications when a hurricane enters a zone bounded by 80° west and 20° north; they did so for Hurricane Isaias in October 2026 and lifted the moratorium on October 8.

Leaving is the goal. FAIR Plan policyholders must reapply in the voluntary market every two years, and anyone with a valid offer of comparable coverage is ineligible. TWIA runs voluntary depopulation programs created in 2015; current participants include USAA, Cypress Texas Insurance Company and Weston Property & Casualty.

Claims

Both associations take claims 24 hours a day: the FAIR Plan at 800-979-6440 (option 1) or online, TWIA at 800-788-8247 (option 1) or online. TWIA claims run on statutory clocks: report within one year of the damage; TWIA has 60 days to accept or deny and 10 days to pay; appraisal must be demanded within 60 days of acceptance; and a suit over a denial must follow a notice of intent and be filed within two years. A 2025 law (SB 458) requires FAIR Plan and other residential policies to carry an appraisal provision.

Ratings and reputation

Neither association publishes a financial strength rating or appears in J.D. Power's studies. Their ability to pay rests on premiums, reinsurance and statutory backstops: TWIA's $4.3 billion of 2026 funding, and for the FAIR Plan $800 million of reinsurance for June 2026 to May 2027 ($700 million above a $100 million retention for a first event), with member assessments behind that. The thin trust fund is the weak point: TWIA forecasts about $59 million at the end of 2026, rising to about $350 million by the end of 2027 only if no significant storm hits.

Who it suits

The FAIR Plan fits Texans who have been declined twice and need basic coverage to keep a mortgage current; TWIA fits coastal owners whose homeowners policy excludes wind and hail. Coastal homeowners often carry three policies: homeowners with a wind exclusion, TWIA and NFIP flood. Check a private carrier or a surplus lines insurer at every renewal.

• Strengths: available when the private market says no; TWIA's limits reach $1,773,000 for a dwelling and contents; TWIA rates unchanged since 2022 and FAIR Plan homeowners rates cut in September 2026; claims deadlines set by statute.
• Weaknesses: FAIR Plan policies are named-perils and settle at actual cash value unless you add replacement cost; no wind or hail deductible below 2% on FAIR Plan homeowners policies; TWIA covers only wind and hail; a nearly empty trust fund means a major storm could trigger statewide surcharges and assessments.

How to contact Texas FAIR Plan and Texas Windstorm Insurance Association