Windstorm Insurance In Shadow Creek Ranch

[bstritt]

Anyone know what catastrophe designation Shadow Creek Ranch has as far as windstorm requirements go? I have loooked on the state's website, and it lists Pearland as an "Inland II", but the map doesn't include SCR.

The reason I ask is because after 2 years in my house in SCR, my mortgage company is now all of a sudden requiring me to have windstorm insurance, on top of my regular hazard insurance. The mortgage company is claiming I am in a "high risk coastal area", and due to recent events (katrina & rita) they are requiring their customers in these high risk areas to be covered, but no one can give me clarification on how they determine that. My thinking is that they are doing it by county, and I think that if I lived in southern harris county, rather than northern brazoria, they wouldn't require it.

Anyone else have this issue? Also, I'm curious to see how many others in SCR do have wind and storm. Am I crazy for not having it?

USAA has qouted around $1200 per yr through the windstorm pool, where as my mortgage company is saying they will get lender placed insurance for $4600. For those of you who do have it, is your coverage amount the full value of the home & contents, ie, total loss, or do you just have a portion covered, thinking that you will likely only have roof damage, not total loss.

Thanks for any info you all can give.

Brad

[Chamo]

Brad,

The way I understand it:

As you say due to recent catastrophes in the coastal areas, insurance companies are not covering Windstorm and Hail within their policies for some counties including Brazoria and part of Harris east of Hwy 146. If you can get an insurance company to cover you for Windstorm and Hail then you don't need additional coverage. However, my guess is nobody is giving it, so on top of your "normal" home insurance, you need to get coverage with the Texas Windstorm Insurance Association.

I have it for whole amount of my building and around 70% of the value of the building for Personal property. Rate is around the cost you are getting quoted $1300, but that is with a 2% deductible on the building side.

I agree with you that it is crazy to think that the Fort Bend side of SCR just a couple of blocks away or some of the older houses just north of BW8 in Harris which might suffer way more than ours in case of a bad storm are not required to have this extra coverage.

I might be wrong so apologize for any wrong info, but as I say, it is the way I always understood the whole deal.

Hope it helps. Chamo

[TheNiche]

Anyone know what catastrophe designation Shadow Creek Ranch has as far as windstorm requirements go? I have loooked on the state's website, and it lists Pearland as an "Inland II", but the map doesn't include SCR.

The reason I ask is because after 2 years in my house in SCR, my mortgage company is now all of a sudden requiring me to have windstorm insurance, on top of my regular hazard insurance. The mortgage company is claiming I am in a "high risk coastal area", and due to recent events (katrina & rita) they are requiring their customers in these high risk areas to be covered, but no one can give me clarification on how they determine that. My thinking is that they are doing it by county, and I think that if I lived in southern harris county, rather than northern brazoria, they wouldn't require it.

Anyone else have this issue? Also, I'm curious to see how many others in SCR do have wind and storm. Am I crazy for not having it?

USAA has qouted around $1200 per yr through the windstorm pool, where as my mortgage company is saying they will get lender placed insurance for $4600. For those of you who do have it, is your coverage amount the full value of the home & contents, ie, total loss, or do you just have a portion covered, thinking that you will likely only have roof damage, not total loss.

Thanks for any info you all can give.

Brad

The lender should specify the kind of coverage that they want from you. Usually they ask that it be replacement value of the house.

BUT in your case, I would be very concerned about whoever told you this. Lenders tend not to make a habit of suddenly, out of the blue, requiring their borrowers to make very large cash outlays because it makes it more difficult for you to pay the mortgage and easier for you to default; it also gives an incentive for customers to refinance. It is possible that there is language in your loan agreement that allows them the right (and I'd be surprised if there is), but then you should be asking what their motive is. They would have to believe that the risk profile has fundamentally changed for your location since the time that they made the loan, and that just doesn't fly with me.

If I were you, I'd try to refinance before I paid that much...and then ONLY IF YOU HAVE TO. Either you've miscommunicated something, and this is just something that they offer as a side business, or I smell a scam.

[bstritt]

Thanks for the quick responses. Just to clarify a couple of things. my loan documents do state that the lender may require insurance above and beyond normal hazard insurance. They are not requiring me to place the insurance through them, they are just requiring that I have it, which I would completely understand and agree with if I was living directly on the coast. From my understanding windstorm insurance in Brazoria county is done through the Texas Windstorm Pool, and that no matter what insurance company I go through the insurance policy price will be the same, and any variance in price is due to different agent fees. USAA quoted $1200 through the windstorm pool, and I have heard others who said that is about what they pay, so I question the ethics of the lender quoting $4600 (even though they have stated that it would likely be more expensive to place it through them). I understand that the lender needs to protect their investment in my loan, but I feel that I am being lumped in with areas that are truly high risk simply because I am in the same county as them.

What I am questioning the lender on is the criteria by which they have decided my house is in a "high risk area". I may very well come to the conclusion that the smartest thing to do will be to get the insurance through USAA, but I would like to have all the information possible. If I decide that I don't want the insurance, then I am looking for some ammo to contest the lenders decision that I am in a "high risk area". Has anyone else tried to contest their lender's requirement for windstorm?

Also, just interested to see what other people in the neighborhood are doing as far as windstorm goes.

Chamo- does your lender require that you have it, or do you have it voluntarily? My insurance company did inform me before I moved down here from town that unlike my old house in Houston in which windstorm was covered under my normal hazard home insurance, that I would have to get windstorm through the Texas Windstorm Pool if I wanted it.

TheNiche: I don't get the feeling that they are trying to get me to refi or default, I think that they are just lumping everyone in Brazoria county together and saying that it is a coastal county and everyone needs to have windstorm (the old cover your 6 mentality), whether it makes sense or not.

Again, thanks for the info.

[Crionics]

I'm with State Farm (in SCR) and was required to go with Texas Windstorm for wind & hail. My neighbors are generally doing the same. About a year ago I noticed Farmers Insurance was advertising full wind & hail coverage for Pearland. Not sure if it's still available. I think the bottom line is the insurers simply look at coastal counties. In SCR, I think we're further inland than many areas in some 2nd tier inland counties. Your quote from USAA looks on target, depending on the size of your house. In the end, we pay a little more in northern Brazoria for home insurance (although car may be cheaper than Harris?). One of the positives though is we are about as far inland as you can be & still have the inland II building code with hurricane straps, garage door bracing, etc.

[Chamo]

Chamo- does your lender require that you have it, or do you have it voluntarily? My insurance company did inform me before I moved down here from town that unlike my old house in Houston in which windstorm was covered under my normal hazard home insurance, that I would have to get windstorm through the Texas Windstorm Pool if I wanted it.

As you, I have been in SCR for a couple of years. When i first moved here, I had insurance coverage HO-B through Texas Lloyds whom at the time was covering windstorm. Early 06 Texas Lloyds stopped servicing our area and I had to look for new coverage; at that time could not find a company like Lloyds to cover windstorm so I had to get the windstorm through the Texas Windstorm Pool.

The thing is that the new Home Policy (Now with AAA) + the Windstorm is for a similar $$ value to my old HO-B policy so I never questioned the windstorm the way you are. But yes, my mortgage company requires Windstorm and also Flood Insurance if you are in a fllod zone which we are not, but that one I have it voluntarily.

[brerrabbit]

I went through this very thing when I had to renew my insurance in February and this is what I learned. If you live in Brazoria County you are basically screwed. It is designated as a coastal county so if your address falls in Brazoria County your in the high risk area. I was insured with Allstate when I got a letter in February saying they would no longer insure me for windstorm and hail damage. They would quote me fire and theft and I would have to get storm damage through the Texas Wind Insurance pool. I shopped around and found no one who would give me one policy that would cover it all. I wound up going with Farmers because a member of my church is a Farmers agent. I paid about $550 for fire and theft and liability and paid around $1,400 for storm insurance. This for a house valued at $244k.

How the windpool works is basically this. Its a self funded, non profit pool that covers people in coastal counties in Texas. When I signed up the pool had assets of about $300 million. Should a storm hit and claims need to be paid, then any amount in excess of the fund would become the liability of the insurance companies participating in the pool that wrote the coverage. Farmers had sold around 7% of the policies in the pool so if losses exceeded the $300 million they would be responsible for 7% of the amount above the $300 million.

Lastly, according to friends I have talked to in Pearland it seems that the only company that still offers full coverage in the area is State Farm. I don't think they are writing new policies but if you previously had both your homeowners and auto insurance through them they are continuing to cover those people with full homeowners coverage including storm damage.

[HoustonRealtor]

I don't have my policy info with me, but I don't think I pay anywhere near what some of you are paying. I had my builder supply me with a Form WPI-8 (Certificate of Compliance issued by Texas Department of Insurance, Property & Casualty Program - Windstorm Inspections). This certifies that my home was erected in accordance with building construction requirements for windstorm coverage.

A home that is built to these standards is considered less of a risk and the premium is adjusted accordingly. You can search if your home is certified by visting the TDI website: CLICK HERE

[Chamo]

I don't have my policy info with me, but I don't think I pay anywhere near what some of you are paying. I had my builder supply me with a Form WPI-8 (Certificate of Compliance issued by Texas Department of Insurance, Property & Casualty Program - Windstorm Inspections). This certifies that my home was erected in accordance with building construction requirements for windstorm coverage.

A home that is built to these standards is considered less of a risk and the premium is adjusted accordingly. You can search if your home is certified by visting the TDI website: CLICK HERE

I checked and mine is.

I would imagine that the Texas Windstorm Insurance Association does this type of check when issuing the policy, but I will send them the certificate to see if it changes my premium.

Thanks!

[HoustonRealtor]

I checked and mine is.

I would imagine that the Texas Windstorm Insurance Association does this type of check when issuing the policy, but I will send them the certificate to see if it changes my premium.

Thanks!

I had to provide a copy to my State Farm agent before I could get the discount.

[brerrabbit]

The cost I mentioned in my previous post is with the certificate. It is my understanding that you cannot even get coverage from the pool without the certificate. Several friends with older homes in the area had to have work done on their houses just to bring them up to standard to get the certificate so they could even get in the wind pool.

[bstritt]

When I got the quote through the windstorm pool, I didn't have to provide the certificate, and they still gave the discount- so I guess either my builder or the city inspector supplied it to them. I looked up my address on the TDI website and it didn't come up, but when I called they said they had it on record. Also, I read an article stating that if your home was built to higher than required standards, you can get a higher discount Info Here, not sure if that is still the case. I would certainly call your agent to be sure that you are getting the discount.

The $1,200 qoute is for 205k dwelling, and 155k contents. My lender isn't requiring me to have full coverage, just coverage equal to the amount of the principle left on the loan, and they couldn't care less about me covering contents. I was informed that if you purchase insurance through the pool, that they require you to cover at least 80% of the dwelling value. If I bump the dwelling coverage down to 165k and the contents down to 75k, it brings the premium down to $860. I didn't check to see what the price would be if I just had dwelling, and not contents, but I would think it would go down signifcantly more.

[jhime]

Here's the short version that I hope helps:

SCR in a 110 m.p.h. wind speed zone under the influence of the Texas Dept. of Insurance (TDI) for windstorm construction. It's in a Inland II area and if built since 2002 it's supposed to be built under the statewide IRC code. If before 2002, then it will be the SBCCI code. So far, 99% homes I have inspected for buyers in SCR have had windstorm insurance certificates. If not, I check before any inspection and tell the buyer because it can really affect insurance costs.

Properties built or renovated in a first tier coastal county (Brazoria County) require design and inspection by a windstorm engineer that certifies the structure to TDI for the purposes of obtaining an Windstorm Insurance Certificate. Usually a city requires a letter of (windstorm) compliance from engineer before they issue a Certificate of Occupancy but...cities aren't perfect and things slip through.

As TDI adopted the windstorm construction guidelines in 1988 and...SCR is much newer than that you should have a windstorm insurance certificate. However, I have found many properties without certificates for a myrad of reasons and I let people know as soon as they call.

Anyway, I usually find that:

1. Engineer never completed the paperwork for the builder.

2. Engineer didn't get paid by the builder so......"X".

3. Home didn't comply with the engineer so engineer refused to certify it.

4. Address was entered incorrectly by engineer or TDI staff.

.......other reasons and excuses I have found to be truly "interesting".

You can find out if your home has a windstorm insurance certificate by following this link:

https://apps.tdi.state.tx.us/windstormsearch/start.jsp

Tip: don't type in city; only need first few letters of street.

If you can't find address sometimes the address was mis-spelled or entered wrong at the state level so you may have to try a different combinations of things. If push comes to shove you can call TDI and ask (phone number on the link).

Also, try using a neighbors address and see if he/she has a certificate. The same builder usually uses the same engineer and if you can find out who did the engineering on your street you can track down the engineer from the TDI site.

If you give up after really trying you can call me (after 2 PM daily M-F) and I'll do a search from my linked sources.

I hope this helps!

James L. Hime

IRC Combination Code Certified 5188826-R5

SBCCI Combination Code Certified 4614

TDI - Residential Property Inspector 16708061031

TREC - PI 1646

281-337-4052

[Timnwendy]

Next month I am closing on a new home in Brazoria county, and I recently finalized my homeowners policy through State Farm. As a long time customer of State Farm, I qualified for many discounts, but I will share two that are somewhat related to the topic of this thread.

1. $100/annual discount for WPI-8 certificate

2. $267/annual discount for impact-resistant roofing, more info on that is available here.

If you want to see if your roofing material qualifies for a discount through SF, check out this pdf file of qualifying materials. Perhaps your own insurance carrier will also give a discount if you have a material on that list. I qualified because my homebuilder is Ashton Woods, who uses the Certainteed XT-30-IR shingles.

[BryanS]

What I am questioning the lender on is the criteria by which they have decided my house is in a "high risk area". I may very well come to the conclusion that the smartest thing to do will be to get the insurance through USAA, but I would like to have all the information possible.

I love USAA. I have them. But they are limiting their exposure in the area, and they've added Harris Co to their higher risk list. In 2005, they said they would insure my primary residence and two rental properties (all in Harris, no extra wind storm required). Now (in 2008), they tell me: "We will insure only ONE property, a primary residence in Harris. If you want us to ensure everything, you'll need to move... out of Harris, out of Brazoria, out of Galveston, out of..." Basically, no where along the coast, no county that touches the coast. They actually suggested I move. When I told them that it was it not feasible for me to live in central Texas, and commute to Houston, where I work, they did not seem amused. So I am going to be forced now to use a different insurance company (because I need to extend liability from my prime residence to my rentals... and USAA won't let me do that any more...). I am keeping them for auto though.

If all you have is a single prime residence, and USAA says they will insure you (even though you need wind storm via "the pool"), go with them (even if their rates are little higher). You get what you pay for and unlike other insurance companies; you really are "in good hands" - with USAA.

[sarahiki]

Brad,

The way I understand it:

As you say due to recent catastrophes in the coastal areas, insurance companies are not covering Windstorm and Hail within their policies for some counties including Brazoria and part of Harris east of Hwy 146. If you can get an insurance company to cover you for Windstorm and Hail then you don't need additional coverage. However, my guess is nobody is giving it, so on top of your "normal" home insurance, you need to get coverage with the Texas Windstorm Insurance Association.

I have it for whole amount of my building and around 70% of the value of the building for Personal property. Rate is around the cost you are getting quoted $1300, but that is with a 2% deductible on the building side.

I agree with you that it is crazy to think that the Fort Bend side of SCR just a couple of blocks away or some of the older houses just north of BW8 in Harris which might suffer way more than ours in case of a bad storm are not required to have this extra coverage.

I might be wrong so apologize for any wrong info, but as I say, it is the way I always understood the whole deal.

Hope it helps. Chamo

So, it sounds like there would be an advantage to buying in the Fort Bend part of SCR, in terms of insurance coverage? I am looking at houses in the Pearland area and I appreciate all these posts; it's helpful to have some of this information in advance.

One other question... some of the houses I'm looking at were built around 1997... am I likely to run into difficulties getting coverage because they weren't built according to current codes?

Thanks-

[CWS]

Your windstorm insurance may be less expensive, but I do not believe that Fort Bend County requires houses to be built to the windstorm standards that Brazoria County does. You might find yourself with a house with less strength in the face of strong winds.

[Timnwendy]

If you (or your builder) has applied for a Windstorm certificate from the state, you can find the status of it by doing a search at this link. It's really nice that you can check on your property early in the process, to make sure it is in fact being certified (the whole process will take months for new construction).