Texas P&C Insurance Guaranty Association Protects Texans

By Jenny Melendez · More articles

Texas · A guaranty fund is not an insurance company

The Texas Property and Casualty Insurance Guaranty Association pays certain claims after a licensed property-casualty company is ordered insolvent. It does not sell policies. It does not cover surplus lines. The figures below are from TPCIGA’s own FAQ, not a guess.

TPCIGA is a nonprofit the legislature created. Its statute is Texas Insurance Code chapter 462. Every company licensed to sell property and casualty insurance in Texas has to be a member. TPCIGA’s responsibility starts when a court finds the insurer insolvent and the Texas commissioner designates it an impaired insurer. The claimant or the insured has to be a Texas resident, or the claim has to arise from property permanently located in Texas. It can pay covered claims and defend under a liability policy, within the act. It is not a substitute for picking a company that is still solvent. A complaint to the Texas Department of Insurance is a different process. It does not put a company into liquidation, and it does not pay your claim.

The cap is the policy limit or $300,000, whichever is less, with a workers’ compensation exception. TPCIGA’s FAQ says benefits are generally capped at $300,000 or the limits of the policy, whichever is less, and that it pays the full amount of a covered claim for statutory workers’ compensation benefits. You have to use other insurance first. TPCIGA takes a credit for those limits. It does not handle non-workers’ compensation claims for an insured whose net worth is $50 million or more. It does handle those insureds’ workers’ compensation claims and then seeks reimbursement. Unearned premium is a covered claim up to $25,000, after the receiver sends the records. Life, health, title, surplus lines, credit insurance, mortgage guaranty, fidelity and surety bonds, and ocean marine are outside this fund. The FAQ points to section 462.007 for the rest of the exceptions. A surplus-lines policy does not get this safety net.

What property and casualty means before anyone is insolvent: property and casualty in Texas. A complaint, which is not this fund: filing a complaint.

If your company is impaired, start with TPCIGA’s claims page, not with a new quote. Ask an agent only about a replacement policy after you know the old claim has a home.

Sources and further reading

  1. TPCIGA — Frequently asked questions
  2. Texas Insurance Code chapter 462
  3. Freedom — Property and casualty insurance

Explore Insurance Info by Category:

Auto Insurance

Home Insurance

Specialty Insurance

Business Insurance

Miscellaneous Insurance

Spanish Espanol Auto Insurance Seguro

Spanish Espanol Home Property Insurance Seguro

Spanish Espanol Insurance Miscellaneous Seguro