TEXAS FAIR PLAN ASSOCIATION POLICY, RATING …

1 TEXAS fair plan ASSOCIATION . policy , RATING and underwriting MANUAL. TABLE OF CONTENTS. Page I. INTRODUCTION .. 1. II. GENERAL RULES .. 1. III. LIMITS OF LIABILITY AND COVERAGE RELATIONSHIPS - TEXAS . HOMEOWNERS policy FORM A (HO-A) .. 1. A. TEXAS Homeowners policy Form A (HO-A) Limits Of Liability .. 1. IV. DESCRIPTION OF COVERAGES (HO-A) .. 2. A. Section I Coverages Property 2. B. Section II Coverages Liability TEXAS Homeowners policy - Form A (HO-A) .. 3. V. MANDATORY COVERAGES (HO-A) .. 3. VI. ENDORSEMENTS (HO-A) .. 3. VII. LIMITS OF LIABILITY AND COVERAGE RELATIONSHIPS TEXAS . DWELLING policy FORM 1 (TDP-1) .. 6. A. TEXAS Dwelling policy Form 1 (TPD-1) Limits Of Liability .. 6. VIII. DESCRIPTION OF COVERAGES (TDP-1) .. 7. A. Section I Coverages Property 7. IX. ENDORSEMENTS (TDP-1).

2 8. X. LIMITS OF LIABILITY AND COVERAGE RELATIONSHIPS - TEXAS fair plan . TENANT policy AND TEXAS fair plan CONDOMINIUM policy .. 9. A. TEXAS fair plan Tenant policy and TEXAS fair plan Condominium policy Limits Of 9. XI. DESCRIPTION OF COVERAGES ( TEXAS fair plan TENANT policy . AND TEXAS fair plan CONDOMINIUM policy ) .. 9. A. Section I Coverages Property 9. B. Section II Coverages Liability TEXAS fair plan Tenant policy and TEXAS fair . plan Condominium policy ..10. XII. MANDATORY COVERAGES ( TEXAS fair plan TENANT policy . AND TEXAS fair plan CONDOMINIUM policy ) ..10. XIII. ENDORSEMENTS ( TEXAS fair plan TENANT policy . AND TEXAS fair plan CONDOMINIUM policy ) ..10. XIV. MANUAL PREMIUM XV. TRANSFER OR ASSIGNMENT ..13. XVI. INFLATION COVERAGE ..13. XVII. APPLICATIONS ..14. A. Application Submission B.

3 Payment Options ..15. XVIII. CHANGES AND MID-TERM PREMIUM XIX. XX. EFFECTIVE DATE AND IMPORTANT NOTICES ..16. XXI. REDUCTION IN HOMEOWNERS PREMIUM ..16. A. Home Security Devices ..16. B. Automatic Sprinkler System ..17. XXII. ELIGIBILITY ..17. TEXAS fair plan ASSOCIATION Page (i). policy , RATING and underwriting Manual Effective July 1, 2013. A. Eligible B. Owner C. Incidental D. Farm E. Additional Insured: HO-A ..19. F. Replacement Cost Personal Property and Coverage A (Dwelling) ..19. G. (Limited) Water Damage Coverage ..20. H. General Change Endorsement ..20. I. Renters Insurance ..20. J. Rental K. XXIII. SECONDARY RESIDENCE PREMISES ..20. XXIV. SEASONAL XXV. RATING RULES ..21. A. Construction ..21. B. Mixed Construction ..21. C. Three or More Types of Construction ..21. D. Public Protection Classification E.

4 Interpolation ..23. F. Rate and Premium Computation Rule - Homeowners ..23. G. Rate and Premium Computation Rule- Dwelling ..29. H. Rate and Premium Computation Rule- Tenant and Condominium ..29. XXVI. policy PERIOD ..30. XXVII. BINDING AUTHORITY ..30. XXVIII. REPLACEMENT COST ESTIMATOR ..31. XXIX. PROPERTY INSPECTIONS ..31. A. Role of the Agent ..31. B. TFPA plan PROCEDURES ..32. XXX. underwriting CREDIT/SURCHARGES ..33. A. Loss History ..33. B. Condition Charges ..33. XXXI. UNINSURABLE PROPERTIES ..34. A. Condemned B. Property Code Violations ..34. C. Property In Disrepair/Existing Damage ..34. D. Business Property or Similar Exposure ..34. E. Vacant Property ..34. F. Material Misrepresentation, Insurance Fraud or Arson ..34. G. Inaccessible Property ..35. H. Excessive Or Unusual Liability Exposure.

5 35. XXXII. UNINSURABLE APPLICANTS ..35. A. Insurance Related Offenses ..35. XXXIII. CANCELLATIONS/VOIDING, MID-TERM CHANGES, AND REFUSALS TO. RENEW ..35. XXXIV. REFUSAL TO RENEW ..37. XXXV. underwriting RULES ..37. A. Loss History ..37. B. (Limited) Water Damage Coverage ..38. C. Deductible ..39. D. Condition of The Dwelling ..39. TEXAS fair plan ASSOCIATION Page (ii). policy , RATING and underwriting Manual Effective July 1, 2013. E. Unconventional Construction ..39. F. Modular Homes vs. Mobile Homes ..40. G. Roofing ..41. H. Liability Exposures ..41. I. Electrical Wiring ..43. J. Heating Systems ..43. K. Inspection Requirements HO-A and TDP-1 ..43. L. underwriting Reports ..44. M. Conflict With Laws ..44. XXXVI. RIGHT TO APPEAL ..45. XXXVII. TEXAS PROPERTY INSURANCE RATING TERRITORIES.

6 Error! Bookmark not defined. XXXVIII. RATE TABLES, DEDUCTIBLE ADJUSTMENT CHART AND. PREMIUM CHARTS .. Error! Bookmark not defined. TEXAS fair plan ASSOCIATION Page (iii). policy , RATING and underwriting Manual Effective July 1, 2013. TEXAS fair plan ASSOCIATION . policy , RATING and underwriting MANUAL. I. INTRODUCTION. The TEXAS fair plan ASSOCIATION (TFPA) was established by Insurance Code Article for the purpose of delivering residential property insurance to qualified citizens of TEXAS in areas determined by the Commissioner of Insurance to be underserved areas. The rates, rules, forms and endorsements herein shall apply in all cases provided for in this policy , RATING and underwriting Manual (Manual). II. GENERAL RULES. The TFPA Residential Property Insurance Program provides property and liability coverage, using the forms and endorsements specified in this Manual.

7 This Manual contains the rules and classifications governing the writing of the residential property insurance provided by TFPA. The rules, rates, form and endorsements of the TFPA, for each coverage, shall govern in all cases specifically provided for in this Manual. This Manual contains the necessary underwriting references to guide the agent in writing the available insurance coverage for TFPA eligible applicants. Where applicable, the TFPA plan of Operation will govern when any discrepancies may exist between this Manual and the plan of Operation. An agent and/or agency may not require as a condition for writing a TFPA policy the sale or previous purchase of another policy ( , auto, life, health, etc.) with the agent and/or agency. III. LIMITS OF LIABILITY AND COVERAGE RELATIONSHIPS - TEXAS .

8 HOMEOWNERS policy FORM A (HO-A). The maximum limit of Coverage A available through the TFPA shall be $1,000,000. A. TEXAS Homeowners policy Form A (HO-A) Limits Of Liability SECTION I PROPERTY COVERAGES. A Dwelling up to $1,000,000*. Other Structures 10% of A . B Personal Property 50%** of A . Loss of Use 10% of A . *Currently, coverage may not be purchased in excess of $1,000,000. In the future, reinsurance may be available and purchased for amounts in excess of $1,000,000. ** Increased Personal Property Coverage of 60% or 70% of A is available for an additional premium. Applicable factors may be found in the RATING section of this Manual under TFPA. HOMEOWNERS TABLE D. TEXAS fair plan ASSOCIATION Page 1. policy , RATING and underwriting Manual Effective July 1, 2013. SECTION II LIABILITY COVERAGES.

9 C Personal Liability $100,000 or $300,000. D Medical Payments To Others $5,000. Unless otherwise stated, Coverage C limits apply on an occurrence basis; Coverage D limits on an each person basis. B. Changes. The limit of liability for Coverage Other Structures and D may not be changed. C. Deductibles. 1% or 2%. A single selected deductible will apply to both Clause 1 (Wind and Hail) and Clause 2 (Other Perils). Note: After the policy has been in effect for 90 days, deductible options may only be amended effective at the normal policy renewal date. A policy may not be rewritten to circumvent this restriction. IV. DESCRIPTION OF COVERAGES (HO-A). A. Section I Coverage Property Damage The following is a general description of the coverage provided by the TEXAS Homeowners policy - Form A (HO-A).

10 The policy should be consulted for exact contract conditions. TEXAS Homeowners policy - Form A (HO-A). Fire or Lightning Yes Sudden and Accidental Damage From Smoke Yes Windstorm Hurricane and Hail ** Yes Explosion Yes Aircraft and Vehicles Yes Vandalism and Malicious Mischief Yes Riot and Civil Commotion Yes Theft Yes ** Windstorm, hurricane and hail coverage for property located in the designated catastrophe area as defined by the Commissioner of Insurance may not be provided by the TFPA. A policy written under the TFPA on such property must have Endorsement HO-140, Windstorm, Hurricane and Hail Exclusion Agreement, attached to the policy . TEXAS fair plan ASSOCIATION Page 2. policy , RATING and underwriting Manual Effective July 1, 2013. B. Section II Coverage Liability TEXAS Homeowners policy - Form A (HO-A).