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Key Takeaways

  • TPCIGA protects Texas policyholders when P&C insurers become insolvent
  • TPCIGA covers claims up to $300,000 per claimant for most covered claims
  • Workers' compensation claims are covered with higher limits
  • TPCIGA does not cover surplus lines policies or self-insured plans
  • Producers cannot advertise or use TPCIGA coverage as a selling point
Last updated: January 2026

Texas Property and Casualty Insurance Guaranty Association (TPCIGA)

The Texas Property and Casualty Insurance Guaranty Association (TPCIGA) protects Texas residents when P&C insurance companies become insolvent.

Purpose and Function

TPCIGA:

  • Protects policyholders of insolvent P&C insurers
  • Pays covered claims up to statutory limits
  • Funded by assessments on member insurers
  • Operates under state law supervision

How It Works

When a P&C insurer becomes insolvent:

  1. TDI takes over - Places insurer in receivership
  2. TPCIGA activates - Takes responsibility for covered claims
  3. Claims processed - TPCIGA pays covered claims
  4. Assessments made - Member insurers pay assessments

Coverage Limits

TPCIGA provides coverage up to specific limits:

Claim Limits

Coverage TypeMaximum
Most Covered Claims$300,000 per claimant
Workers' CompensationStatutory limits
Homeowners Claims$300,000
Auto Claims$300,000
Commercial Claims$300,000

Important Limitations

  • $300,000 maximum per claimant
  • $100 deductible on first-party claims
  • Net worth reduction may apply
  • Large commercial claims may have lower priority

What Is Covered

TPCIGA covers claims under:

Covered Policies

  • Homeowners insurance
  • Auto insurance
  • Commercial property
  • Commercial liability
  • Workers' compensation

What's NOT Covered

Not CoveredReason
Surplus lines policiesNon-admitted insurers
Self-insured plansNot insurance policies
Title insuranceSeparate guaranty fund
Ocean marine insuranceExcluded
Amounts above limitsStatutory limit applies
Life & healthSeparate guaranty association

Funding

TPCIGA is funded by assessments on member insurers:

Assessment Process

  • Member insurers pay assessments when needed
  • Based on premium volume in Texas
  • May be recouped through rate increases
  • Separate accounts by line of insurance

Assessment Accounts

AccountPurpose
Workers' Comp AccountWC claims only
Auto AccountAuto claims
Property AccountProperty claims
Other AccountAll other claims

Producer Restrictions

Advertising Prohibition

Producers cannot:

  • Use TPCIGA coverage as a selling point
  • Advertise guaranty association protection
  • Imply policies are "guaranteed" by TPCIGA
  • Compare TPCIGA to FDIC
  • Suggest choosing insurer based on TPCIGA

Required Conduct

  • Provide accurate information if asked directly
  • Cannot misrepresent coverage limits
  • Cannot suggest coverage exceeds actual limits
  • Must not use to induce sales

Exam Tip: Remember that producers CANNOT use TPCIGA coverage as a selling point. This is a frequently tested rule in Texas.

Claims Process

When an insurer becomes insolvent:

  1. Notice sent - TPCIGA notifies policyholders
  2. Claims submitted - Directly to TPCIGA
  3. Claims evaluated - Within statutory limits
  4. Benefits paid - If claim is covered
  5. Policy may end - Policyholder finds new coverage

Net Worth Reduction

For insureds with net worth over $50 million:

  • Coverage may be reduced or eliminated
  • Encourages large companies to use other risk management
  • Does not apply to workers' comp claims
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TPCIGA Coverage Limits
Test Your Knowledge

What is the maximum coverage TPCIGA provides for most P&C claims?

A
B
C
D
Test Your Knowledge

Can a Texas P&C producer use TPCIGA coverage as a selling point?

A
B
C
D
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