ORINOCORP

TWIA vs Texas FAIR Plan: Differences, Cost, Who Qualifies

TWIA and the Texas FAIR Plan are both “insurers of last resort,” but they sell different things: TWIA sells wind and hail coverage for property on the Texas coast, and the FAIR Plan sells the rest of a basic home policy, such as fire, to owners that private companies turned down. Texas law does not let the FAIR Plan write windstorm and hail coverage for property that is eligible for TWIA, so a coastal homeowner who cannot get a private policy at all may need both. TWIA insured 288,676 properties at the end of June 2026, up from 184,890 in 2020, and TDI’s county data counts 73,251 FAIR Plan policies in 2025.

TWIA vs the FAIR Plan, side by side

TWIA Texas FAIR Plan
What it sells Windstorm and hail insurance for homes and commercial property Basic residential property coverage: homeowners, dwelling, condominium and tenant policies
Who it is for Owners in its designated area who “cannot get this coverage in the regular market” Owners of houses, townhouses, condos and manufactured homes that insurers turned down
Where 14 coastal counties and part of Harris County east of Highway 146 Statewide; it may not write wind and hail for property in the TWIA area
Must you be turned down? Yes, by at least 1 private insurer writing wind and hail in the 14 coastal counties Yes, by at least 2 insurers, and you must not hold a valid offer of comparable coverage
Maximum limit Dwellings and individually owned townhouses: $1,773,000 Dwelling: up to $1,000,000; liability $100,000 or $300,000
How the dwelling is valued Not stated in its Fact Book Actual cash value; replacement cost can be added on the Homeowners policy only
Size 288,676 properties, $128.3 billion of exposure (June 30, 2026) 73,251 policies in TDI’s 2025 county data
How you apply Through a Texas-licensed insurance agent Through an agent
Extra requirements Windstorm certificate (WPI-8) from TDI; flood insurance may be required in flood zones Proof of two declinations; some properties are ineligible
Regulated by TDI (TWIA says it is a not-for-profit insurer, not a state agency) TDI approves its rates

TWIA’s own figures: it is the market of last resort, “does not compete with the private insurance market,” and operates at costs of 4.9% of premium, against 9.8% for the private market, per TWIA.

Do I need both?

Possibly. The path TDI and the two organizations describe:

  1. You can’t get a private policy that covers wind and hail on a coastal property. TWIA covers wind and hail if you meet its rules: you were turned down by an insurer writing wind and hail in the coastal counties, the home meets windstorm building codes (certificate), and the property is in an insurable condition. You apply through an agent.
  2. If you also can’t get the rest of the policy (fire, theft, liability), the FAIR Plan sells it after two declinations. The FAIR Plan itself says applicants in the TWIA area who qualify may need both policies.
  3. Neither covers floods. TDI says home insurance policies don’t cover flood damage, and your lender will require flood insurance if the property is in a flood zone. TWIA says policyholders in flood zones may be required to buy flood insurance.
  4. Don’t wait for a storm. TDI says TWIA won’t sell you a policy if a hurricane is on the way.

Inland, the FAIR Plan does not need TWIA: its extended coverage can add windstorm and hail outside the TWIA area, but it is optional and has to be added.

What each costs, county by county

TDI’s 2025 county data (the map on its market overview page) gives the average TWIA premium, the average FAIR Plan premium, and the average for private policies without wind coverage in the coastal counties, where TWIA covers wind:

County TWIA policies Average TWIA premium FAIR Plan policies Average FAIR premium Private policy without wind TWIA + FAIR TWIA + private
Galveston 81,754 $2,919 7,001 $1,168 $1,347 $4,087 $4,266
Brazoria 54,984 $2,636 4,617 $1,097 $1,371 $3,733 $4,007
Nueces 47,205 $2,463 1,460 $1,246 $1,198 $3,709 $3,661
Jefferson 33,080 $2,422 3,457 $883 $1,417 $3,305 $3,839
Cameron 10,240 $1,927 516 $841 $1,183 $2,768 $3,110
Aransas 7,870 $3,142 273 $807 $1,299 $3,949 $4,441

(The two sums are ours. They add averages from different sets of homes and cover different things, so they are a rough guide, not a quote.)

Three points:

2026 rate changes

TWIA: its own 2026 analysis says its residential rates are adequate by 9%. At its August 2026 meeting the board directed staff to file a 0% rate change with TDI for 2027 policies. TWIA must make an annual rate filing with TDI by August 15, and any increase needs a two-thirds board vote and the commissioner’s approval.

FAIR Plan: TDI Commissioner’s Order 2026-9939, dated May 20, 2026, approved changes effective for new and renewal business on September 1, 2026. By statewide average:

FAIR Plan policy Approved change, September 1, 2026
Homeowners -2.6% (Greater Dallas-Fort Worth -4.5%; coastal Tier 1 -21.6%; coastal Tier 2 +0.3%)
Dwelling, fire coverage +3.5%
Dwelling, extended coverage +21.6% (inland zones capped at +25%; coastal Tier 1 -22.0%)
Condominium -7.5%
Tenants -25.0%

The order says these rate changes reflect a cap of +25% on indicated increases and -25% on indicated decreases. Changes vary by zone, so your own change depends on where you live and which policy you hold.

How TWIA is funded and how its claims work

The 2026 hurricane season funding TWIA reports is $4.3 billion: $2.3 billion in reinsurance, $1 billion in assessments on private insurers that write property insurance in Texas, $1 billion in a state-funded financing arrangement, and $25 million in its reserve fund. That is the 50-year probable maximum loss that the law requires. Texas law changed TWIA’s funding structure in 2025, per TWIA.

Claims have special rules. TWIA says its claims are not subject to Texas Insurance Code Chapters 541 (unfair settlement practices) and 542 (prompt payment of claims) or the Deceptive Trade Practices Act. Chapter 2210 gives policyholders specific remedies instead: 60 days after a claim decision to request an appraisal, and two years to give notice of intent to sue over a denial. TWIA reports that about 4% of claims involve a dispute and 0.36% a lawsuit. We found no comparable statement for the FAIR Plan.

Getting out of TWIA

TWIA says it has two depopulation programs that help policyholders find private coverage: a voluntary program in which insurers can make offers at renewal (4,536 policies bound) and a program in which insurers assume large blocks of policies. That second one took out more than 16,000 policies in six rounds from 2016 to 2023, and no round has occurred since 2023 “because of a lack of insurer interest.” Ask your agent each year whether a private company will now write your wind and hail.

Questions people ask

Is TWIA the same as the FAIR Plan? No. They are separate associations with different coverage, rules and rates. TWIA sells wind and hail on the coast; the FAIR Plan sells basic property coverage statewide.

Does the FAIR Plan cover wind and hail? Not for property eligible for TWIA. Elsewhere it is an optional extended coverage that has to be added.

Which is cheaper, TWIA or the FAIR Plan? They cover different things, so they are not substitutes. In the counties above, TWIA’s average premium is two to four times the FAIR Plan’s, but TWIA covers the wind and hail that a coastal home is most exposed to.

Can I have a TWIA policy and a private home policy? Yes: many coastal owners have a private policy without wind plus TWIA. In the coastal counties TDI’s data shows tens of thousands of private policies without wind coverage.

Do I need flood insurance with TWIA? Policyholders in flood zones may be required to buy it, TWIA says, and TDI says home insurance doesn’t cover flood.

What this page can’t tell you

This page is information, not insurance advice. Confirm eligibility and coverage with a licensed agent or TDI (800-252-3439).