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You are here: Home . rules . 2002 . 0129b-059
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Subchapter E. Texas Windstorm Insurance Association

Division 3.

Policy Forms

28 TAC §5.4101

Division 5

Texas Special Mobile Home Windstorm and Hail Insurance Policy

28 TAC §5.4401

The Commissioner of Insurance adopts amendments to §5.4101 concerning the adoption by reference of the dwelling and commercial policy forms for windstorm and hail insurance coverage by the Texas Windstorm Insurance Association (Association or TWIA), and §5.4401 concerning the adoption by reference of the Texas Special Mobile Home Windstorm and Hail Insurance Policy. The amendments to §5.4101 and §5.4401 are adopted without changes to the proposed text published in the December 13, 2002 issue of the Texas Register (27 TexReg 11715).

The adoption of three amended policy forms was requested by the Association in a petition filed with the department on March 12, 2002, and amended on November 13, 2002 (Ref. No. P-0302-8). The Commissioner held a public hearing on the proposed amendments on January 8, 2003, Docket No. 2540. These adopted policy amendments concern provisions relating to mold coverage in the dwelling, commercial, and mobile home policies. The amendment to §5.4101 adopts by reference an amended dwelling policy form and an amended commercial policy form. The amendment to the dwelling policy adds a new exclusion no. 9 entitled "Mold, Fungi, or Other Microorganisms" and the amendment to the commercial policy adds a new exclusion no. 10 entitled "Mold, Fungi, or Other Microorganisms" to the exclusions sections of these policies. The language in the exclusions is essentially the same for both of the policies. The exclusion defines mold, fungi or other microorganisms as the presence, growth, proliferation, spread, or any activity of fungi or mold and other microorganisms. The exclusion applies to the cost to remove mold, fungi or other microorganisms from covered property, the cost to tear out and replace any part of the building or other property required to gain access to the mold, fungi or other microorganisms, and the cost of testing to confirm the absence or presence or level of mold, fungi or other microorganisms. The exclusion contains an exception that coverage is provided for mold, fungi or other microorganisms located upon the portion of covered property which must be repaired or replaced because of sudden, accidental, direct physical damage resulting from wind or hail that is a covered loss under the policy. The exception also specifies that sudden and accidental damage shall include a loss event that is hidden or concealed for a period of time until it is detected provided the loss was reported no later than 30 days after the date it was detected or should have been detected. The exception further specifies that the mold, fungi or other microorganisms coverage in the exception does not include coverage for: 1) the cost to treat, contain, remove or dispose of the mold, fungi or other microorganisms beyond that which is reasonably necessary to repair or replace the covered property; 2) the cost of testing for the absence or presence of mold, fungi or other microorganisms; 3) the cost of decontamination of the residence premises; and 4) any increase in Loss of Use or Debris Removal coverage or diminution in value. The amendment to §5.4401 adopts by reference an amended Texas Special Mobile Home Windstorm and Hail Insurance Policy (mobile home policy). The amendment to the mobile home policy adds a new exclusion entitled "Mold, Fungi, or Other Microorganisms" to the policy. The language of the exclusion is essentially the same as that described in the adopted exclusions in the dwelling and commercial policy forms. Basically, this exclusion provides a new, broad mold, fungi or other microorganisms exclusion, but it contains the same exception as previously described for the dwelling and commercial policies. The other provisions in the exclusion limit the mold, fungi or other microorganisms coverage to provide that there is no mold, fungi or other microorganisms coverage beyond the physical damage to the covered property and that only reasonable and necessary costs to repair or replace the damaged covered property are covered. Any expenses beyond this due to mold, fungi or other microorganisms, such as remediation, testing, decontamination, or any increase in expenses for loss of use and/or debris removal due to remediation or testing are not covered.

The adopted amendments to §5.4101, adopt by reference policy forms containing a new, broad mold, fungi, or other microorganisms exclusion. The other provisions in the adopted exclusion limit the mold, fungi, or other microorganisms coverage to provide that there is no coverage beyond the physical damage to the covered property and that only reasonable and necessary costs to repair or replace the damaged covered property are covered. Any expenses beyond this due to mold, fungi, or other organisms, such as remediation, testing, decontamination, or any increase in expenses for loss of use and/or debris removal due to remediation or testing are not covered. The adopted amendment to §5.4401 adopts by reference the amended Texas Special Mobile Home Windstorm and Hail Insurance policy (mobile home policy) that adds a new exclusion to exclude mold, fungi, or other microorganisms from the mobile policy. The language of this exclusion is essentially the same as that described in the adopted exclusions in the dwelling and commercial policy forms.

No comments were received on the sections.

The amendments are adopted pursuant to the Insurance Code Article 21.49 and §36.001. Pursuant to Article 21.49, §8, the Commissioner is authorized to promulgate policy forms for use by the Association in providing windstorm and hail insurance coverage without regard to other forms filed with, approved by, or promulgated by the Commissioner for use in this state. Article 21.49, §5A provides that the Commissioner may, after notice and hearing, issue any orders which the Commissioner considers necessary to carry out the purposes of Article 21.49, including maximum rates, competitive rates, and policy forms. Insurance Code §36.001 authorizes the Commissioner of Insurance to adopt rules which must be for general and uniform application, for the conduct and execution of the duties and functions of the Texas Department of Insurance only as authorized by statute.

§5.4101. Association Dwelling and Commercial Policy Forms. The Texas Department of Insurance adopts by reference the Texas Windstorm Insurance Association Dwelling Policy and the Texas Windstorm Insurance Association Commercial Policy as amended effective March 1, 2003. These documents are published by and available from the Texas Windstorm Insurance Association, P.O. Box 99090, Austin, Texas 78709-9090. They may also be obtained by contacting the Automobile and Homeowners Division, Mail Code 104-1A, Texas Department of Insurance, 333 Guadalupe Street, P.O. Box 149104, Austin, Texas 78714-9104.

§5.4401. Texas Special Mobile Home Windstorm and Hail Insurance Policy-Deductible Coverage. The Department of Insurance adopts by reference the Texas special mobile home windstorm and hail insurance policy--deductible coverage, as amended effective March 1, 2003. This document is published by and available from the Texas Windstorm Insurance Association, P.O. Box 99090, Austin, Texas 78709-9090. It may also be obtained by contacting the Automobile and Homeowners Division, Mail Code 104-1A, Texas Department of Insurance, 333 Guadalupe Street, P.O. Box 149104, Austin, Texas 78714-9104.



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