TWIA & TFPA Property Damage Evaluation Guidelines
2014
1
TWIA & TFPA
Property
Damage
Evaluation
Guidelines
V. 10-7-2014
TWIA & TFPA Property Damage Evaluation Guidelines
2014
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Contents
Table of Revisions ......................................................................................................................................... 7
Purpose of Document ................................................................................................................................... 9
Introduction .................................................................................................................................................. 9
Disclaimer...................................................................................................................................................... 9
Definitions & Acronyms .............................................................................................................................. 10
General Field Claims Adjuster Guidelines: .............................................................................................. 11
Initial Contact .......................................................................................................................................... 11
Temporary or Emergency Repairs....................................................................................................... 11
Tree Removal: ..................................................................................................................................... 11
Inspection ................................................................................................................................................ 11
Reserve Recommendations .................................................................................................................... 11
Status, Initial, and Final Reports ............................................................................................................. 12
Status Reports ..................................................................................................................................... 12
Initial / Final Reports ........................................................................................................................... 12
Photos ..................................................................................................................................................... 12
Estimating ............................................................................................................................................... 13
Diagramming and Measurements .......................................................................................................... 14
Debris Removal: ...................................................................................................................................... 14
Like Kind and Quality .............................................................................................................................. 14
Matching ................................................................................................................................................. 15
Natural Breaks ......................................................................................................................................... 15
Insured Completed Labor Hours/Repairs
........................................................................................... 15
Permits
................................................................................................................................................... 15
Overhead and Profit
.............................................................................................................................. 15
Sales Tax .................................................................................................................................................. 16
Determination of Cause of Loss: ............................................................................................................. 16
Roof Inspector Safety: ............................................................................................................................. 17
General Roof Loss Guidelines: ................................................................................................................ 17
Hail Damaged Roofs ............................................................................................................................ 17
Evaluation of hail damaged roofs: ...................................................................................................... 18
Wind Damaged Roofs ......................................................................................................................... 18
Roof Loss Cost - Estimating Guidelines: .................................................................................................. 18
Roof Waste Factors: ................................................................................................................................ 20
Depreciation:........................................................................................................................................... 20
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Evaluation of Losses by Roof Type: ......................................................................................................... 21
Flat Roofs ............................................................................................................................................ 21
Tile / Slate Roofs ................................................................................................................................. 21
Metal Roofs ......................................................................................................................................... 21
Wood Roofs ......................................................................................................................................... 21
Additional Roof Loss Evaluation Considerations: ................................................................................... 21
Nailable Surface .................................................................................................................................. 21
Multiple Overlay of Roofing Materials ................................................................................................ 22
Footfall ................................................................................................................................................ 23
Siding/Paint/Stucco ................................................................................................................................. 23
Pools ........................................................................................................................................................ 23
Filling
.................................................................................................................................................. 23
Pool Decking
...................................................................................................................................... 23
Fences
..................................................................................................................................................... 24
Sheds, Outbuildings, and Other Structures
......................................................................................... 24
Pricing for sheds, other outbuildings, and other structures: .............................................................. 24
Retaining Walls
....................................................................................................................................... 25
Interior Damages ........................................................................................................................................ 25
Interior Diagrams .................................................................................................................................... 25
Drywall
................................................................................................................................................... 25
Plaster
..................................................................................................................................................... 26
Wall Coverings
........................................................................................................................................ 26
Paint .................................................................................................................................................... 26
Wall and Ceiling Texture
................................................................................................................... 27
Wallpaper
........................................................................................................................................... 27
Flooring
.................................................................................................................................................. 27
Carpet
................................................................................................................................................. 27
Wood Floors
...................................................................................................................................... 27
Tile Floors
........................................................................................................................................... 28
Vinyl Floors
........................................................................................................................................ 29
Multiple Layers of Floor Coverings
................................................................................................ 29
Electrical
................................................................................................................................................ 29
Testing
................................................................................................................................................ 29
Water Damage to Electrical Fixtures
................................................................................................ 29
Insurable Interest
.............................................................................................................................. 29
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HVAC ....................................................................................................................................................... 29
Reparability Reports
.......................................................................................................................... 29
Reparability
........................................................................................................................................ 30
Ductwork
............................................................................................................................................ 30
Remediation
........................................................................................................................................... 30
Water .................................................................................................................................................. 30
Mold .................................................................................................................................................... 30
Asbestos .............................................................................................................................................. 30
Contractors ............................................................................................................................................. 31
Contractor Estimates
........................................................................................................................ 31
Hiring a Contractor
........................................................................................................................... 31
Mobile/Manufactured Homes
............................................................................................................... 31
Mobile Home Coverage
................................................................................................................... 31
Interior
............................................................................................................................................... 31
Re-leveling
......................................................................................................................................... 31
Xactimate Grades for Mobile Homes
............................................................................................. 32
Personal Property
................................................................................................................................... 32
Special Handling Instructions .............................................................................................................. 33
Identification of Building versus Personal Property
............................................................................. 34
Supplements ........................................................................................................................................... 35
Salvage .................................................................................................................................................... 35
Subrogation
............................................................................................................................................ 35
Replacement Cost & Actual Cash Value Losses ...................................................................................... 36
Replacement Cost Coverage (RCC) ..................................................................................................... 36
Actual Cash Value Losses
.................................................................................................................. 36
Recoverable and Non-Recoverable Depreciation
............................................................................... 36
Items Subject to Depreciation
.......................................................................................................... 36
Guidelines on Withholding of Recoverable Depreciation
................................................................. 37
Guidelines for use of Non-Recoverable Depreciation ........................................................................ 37
XactAnalysis How-to ................................................................................................................................... 37
Add a document ...................................................................................................................................... 37
Request EagleView Roofing Measurement ............................................................................................ 38
QA Approve ............................................................................................................................................. 38
External Data ........................................................................................................................................... 39
Order AER Hail DOL Reports ............................................................................................................... 40
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Order Hail History Reports .................................................................................................................. 40
Order Lightning Strike Reports............................................................................................................ 40
XactAnalysis Assignment Workflow ........................................................................................................ 40
QA Approval: ....................................................................................................................................... 41
Commercial Property Damage Evaluation Guidelines ................................................................................ 42
Introduction ................................................................................................................................................ 42
Roles and Responsibilities ........................................................................................................................... 42
Claims Manager .................................................................................................................................. 42
Claims Examiner .................................................................................................................................. 42
Independent Field Adjusters ............................................................................................................... 43
Executive General Adjuster (EGA) ....................................................................................................... 43
General Adjuster (GA) ......................................................................................................................... 44
Commercial Adjuster (CA) ................................................................................................................... 44
Engineers ............................................................................................................................................. 44
Building Consultants ........................................................................................................................... 44
Independent Contractors .................................................................................................................... 44
Authority of the Policyholder’s Representative .................................................................................. 44
Commercial Policies Insured by TWIA ........................................................................................................ 45
Governmental Entities ........................................................................................................................ 45
Essential Services ................................................................................................................................ 46
Condominiums, Townhouses, and Apartment Buildings .................................................................... 46
Churches and Historical Buildings ....................................................................................................... 47
Large Commercial ............................................................................................................................... 47
Small Commercial ............................................................................................................................... 47
Investigation and Reporting ........................................................................................................................ 47
Reserve Recommendations ................................................................................................................ 48
Coinsurance ............................................................................................................................................ 48
Core Samples....................................................................................................................................... 49
Roof-Top Mounted Equipment ........................................................................................................... 50
Aerial Images ....................................................................................................................................... 50
Claims with a Large Number of Insured Items .................................................................................... 50
Uploading Large Reports ..................................................................................................................... 51
Emergency Services ................................................................................................................................ 51
Evaluating the Loss...................................................................................................................................... 52
Other loss evaluation guidelines: ........................................................................................................ 52
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Material and Labor Sales Tax on Repair Estimates ................................................................................. 53
Commercial HB-3 Policy .............................................................................................................................. 54
Coverage A .......................................................................................................................................... 55
Coverage B .......................................................................................................................................... 56
Common Endorsements ............................................................................................................................. 57
Endorsement 164 – Replacement Cost Endorsement ........................................................................ 57
Endorsement 282 (1) or (2) – Condominium Property Form.............................................................. 58
Endorsement 17 – Business Income Form .......................................................................................... 58
Endorsement 432 – Increased Cost of Construction .......................................................................... 59
Endorsement 26 – Church Form ......................................................................................................... 60
Endorsement 176 – School Form ........................................................................................................ 60
Endorsement 18 -- Builder’s Risk Stated Value Form ......................................................................... 60
Endorsement 21 -- Builder’s Risk Actual Completed Value Form ....................................................... 60
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Table of Revisions
Revision Date
Revised Section
Comments
10/29/2013
Inspection
Specified requirement for Insured to be present during
inspection.
11/04/2013
Disclaimer
Added the Living Document disclaimer.
11/04/2013
Photos
Inserted a note regarding photographing the HVAC drip
pan.
11/04/2013
Diagraming and
Measurements
Inserted a bullet point regarding correlation of damages
using a sketch. Included images for example.
11/04/2013
Roof Loss Cost-Estimating
Guidelines
Inserted a note regarding ridge caps and when to
appropriately apply waste.
11/04/2013
Additional Roof Loss
Evaluation
Considerations
Added “or unusable” to this sentence: In the event of a
covered loss to the outer surface, TWIA will then pay for a
nailable surface due to a defective or unusable
underlayment.
11/04/2013
Footfall
Added “or the damage is below the deductible” and “for
the footfall damage repair” to this sentence: If there is no
damage to the roof, or the damage is below the deductible,
and the Field Claims Adjuster damages the roof by footfall
then the
Insured is reimbursed for the footfall damage repair
without taking a deductible.
11/04/2013
Guidelines on
Withholding of
Recoverable
Depreciation
Removed the language regarding the release of
recoverable depreciation as it did not pertain to field
claims adjusters and changes periodically for specific
events.
11/04/2013
Nailable Surface
Included language for spaced decking and wood shingles
3/4/2014
Status Reports
Addition of the Single Point of Contact (SPOC) rule
3/4/2014
Estimating
Replaced the former “Roof Loss Cost - Estimating
Guidelines” section with the “Estimating” section, better
summarizing the requirements for Field Adjusters to
provide estimates
3/4/2014
Like Kind and Quality
Addition of 20-year 3-tab roofing scenario language
3/4/2014
Determination of Cause
of Loss
Included requirement of weather reports, specifically AER
reports, in all weather-related claims
3/4/2014
General Roof Loss
Guidelines
Bullet point added to dictate process when EagleView is
not available
3/4/2014
Depreciation
Bullet point added stating repairs should not be
depreciated
3/4/2014
Hiring a Contractor
Removed reference to Nexxus and Nex-Vex programs
3/4/2014
Personal Property
Rewording of the personal property section to address
specific handling instructions, instructions related to
theft, vandalism and malicious mischief, vacancy, copper
wiring on TDP-1 policy, and lightning claims
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3/4/2014
Identification of Building
vs. Personal Property
Updated instructions on how Field Adjusters should
address personal property and inventory
3/4/2014
Supplements
Added section on how to address claim supplements
3/4/2014
Actual Cash Value Losses
Rewording of the Actual Cash Value section to better
reflect all TWIA and TFPA policies
3/4/2014
XactAnalysis Assignment
Addition of XactAnalysis assignment workflow section
3/4/2014
ALL
Updated the justification and formatting of the entire
document for uniformity
10/7/2014
Commercial Property
Damage Evaluation
Guidelines
Added guidelines for Commercial handling
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TWIA & TFPA Damage Evaluation Guidelines
Purpose of Document
The guidelines contained in this document were prepared by the Texas Windstorm Insurance
Association (TWIA) and the Texas FAIR Plan Association (TFPA) for use by its staff, its contracted
independent field adjusting firms and their adjusters, as well as other business partners involved in the
evaluation, handling, and servicing of TWIA’s & TFPA’s claims.
Guidelines described in this document may differ for individual claims depending upon the unique facts
and circumstances of each individual claim. This document is intended to serve as a guideline only - the
adjuster should apply professional discretion as each claim is unique.
These guidelines were composed to comply with applicable insurance policies, contracts, and the laws,
rules and regulations of the State of Texas. In the event of any conflict, applicable laws and regulations
will prevail.
Introduction
TWIA & TFPA expects high levels of customer service, communication, professionalism, and expertise at
all times. In addition, a strong sense of urgency and an appreciation of the importance of uniform
compliance with policies, laws and regulations from all our employees and business partners are
expected during the claim process as we assign, dispatch, investigate, evaluate, and pay claims.
Disclaimer
This is a living document and thus, it is subject to revision. It is prepared as an aid to staff, contractors
and associated firms and cannot be relied upon by the regulated community as representation of the
law. Any policy and/or endorsement excerpts, examples, or selections represented in this document
may not reflect the official version. In the event of inconsistency or discrepancy, the controlling policy,
regulation or law prevails. This document will be revised, as necessary, to reflect any relevant future
amendments. Printed or distributed copies cannot be controlled. Announcements contained in such
printed or electronic material are subject to change without notice, and may not be regarded in the
nature of binding obligations on the Associations and/or the State.
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Definitions & Acronyms
ACV
Actual Cash Value, a value figured by subtracting depreciation from the full replacement or
repair cost
ALE
Additional Living Expenses, a calculation of expenses in addition to the typical or normal
daily living expenses
C&O
Cause & Origin (more recently referred to as O&C, or Origin & Cause)
CE
Claims Examiner
CGI
The internal claims management system used by Texas FAIR Plan Association
DOL
Date of Loss
FNOL
First Notice of Loss, the notification sent in from the insured (or the insured's
representative) informing a carrier of a new loss/claim
GC
General Contractor
IA
Independent Adjuster or Field Claims Adjuster
ISO
Insurance Services Office, an online database of claims used to search for prior losses
ITV
Insurance to Value, a percentage of the amount of insurance carried (limit of liability) over
the actual replacement cost value of the property
MSB
Marshall & Swift/Boeckh, reconstruction cost estimator used to determine ITV
NI
Named Insured, the person(s) who has financial interest in the covered property
NOTUS
The internal claims management system used by Texas Windstorm Insurance Association
O&P
Overhead & Profit, a percentage added to a repair estimate to account for a General
Contractor's expense for overhead and profit
POL
Proof of Loss
PPIF
Personal Property Inventory Form, a detailed list of claimed personal property details
including description, serial/model information, date and location purchased, replacement
cost and actual cash value
RCC
Replacement Cost Coverage, refers to a policy that provides full replacement cost benefits
RCV
Replacement Cost Value
ROR
Reservation of Rights
SIU
Special Investigations Unit, investigates suspected insurance fraud
TFPA
Texas FAIR Plan Association
TWIA
Texas Windstorm Insurance Association
Xactimate
Estimating software that can calculate the repair cost of reconstruction as well as the
replacement cost of personal property items
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General Field Claims Adjuster Guidelines:
Initial Contact:
Initial Contact is expected same day or less than 24 hours from assignment.
Temporary or Emergency Repairs
The need for emergency services, tree removal, and temporary repairs to protect the property from
further loss should be addressed at the time of initial contact.
Explain that permanent repairs should not be made before the property is inspected so the Field Claims
Adjuster can see the damage and determine if it was caused by a covered peril. Ask the insured to
provide accurate records and receipts or other documentation for any temporary repairs.
Tree Removal:
Tree Removal is covered under Extensions of Coverage under TWIA/TFPA policies. Extensions of
coverage are not additional insurance and do not increase the limit of liability. If a covered peril has
caused a tree to fall and damage covered property, we will pay for the expense for the removal from
the described location. If the tree needs to be removed before the Field Claims Adjuster is able to
perform the inspection, to mitigate any further damages, ask the Customer to take pictures and keep
receipts.
If additional questions or concerns arise, please consult the TWIA/TFPA Claims Examiner assigned to the
loss.
Inspection
Inspection is expected to take place within 48 hours of Initial Contact. In order to ensure all damages
are addressed during the initial inspection the property must be inspected with the Insured present. If
the Insured is unable to be present within that time frame, put a comment in your file notes explaining
the reasons why you were unable to inspect within the desired time frame
Properly greet and introduce yourself to a customer. Include an explanation of why you are there and
what the customer can expect from your visit and inspection.
Be sure to walk entire property with customer. Allow the customer to point out any and all claimed
damages.
Close your inspection by sharing the next steps of the claims-handling process. End the inspection by
asking the customer “Have I missed anything and have I lived up to your expectations today?”
Dress code should meet business casual standards, and be professional and practical. Denim pants are
not permitted. You should wear shoes that provide adequate traction for traversing a multi-pitched
roof. Have proper identification available should the customer request confirmation of your identity.
Reserve Recommendations
In cases where the loss is expected to exceed $10,000 for Residential losses and $25,000 for
Commercial losses, you must call the TWIA/TFPA Claims Examiner within 24 hours of the Inspection to
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inform them CE of the need for reserves to be properly set and to receive any additional handling
instructions.
Status, Initial, and Final Reports
Status Reports
Status reports are expected to be provided to the TWIA/TFPA Claims Examiner every 7 days from the
claim assignment until loss is resolved. A phone call will suffice, but be sure to notate the file with items
discussed with the Claims Examiner. Inside Desk Claims Examiners are expected to return all contacts
within 24 hours. If the Field Claims Adjuster is not contacted within the expected timeframe, their
respective team lead/manager should forward communications to that firm’s single point of contact at
TWIA/TFPA.
Initial / Final Reports
Initial or Final Reports are expected to be provided within 72 hours of the inspection.
File Documentation
Written file activity notes should be maintained on all TWIA/TFPA claim files. Activities should be
documented in the Field Claims Adjuster’s file or log from first receipt of the assignment to final report
submission. Any documentation or evidence the Field Claims Adjuster obtains related to the claim
should be evaluated, responded to, included in their file, and provided to TWIA/TFPA.
To Be Included in the Field Claims Adjuster Report (PDFs):
One copy of your invoice.
Copy of TWIA/TFPA Fee Schedule Breakdown (if charges not broken down on invoice)
Activity Log (including T&E log)
Field Claims Adjuster’s General Loss Assessment
MSB Valuation (RCV & ACV amounts)
Statement of Loss
Building/Personal Property Worksheet (estimate/inventory)
Field Claims Adjuster’s Photo Sheets (labeled)
Documents received from insured, including e-mails, estimates, invoices, receipts, photos, proof of
loss(541/542 claims only), Advance Pay Requests.
Copies of letters/e-mails sent to insured.
Photos
Clear digital photos are required. Photos should be numbered, identified by the building or item
number and room/area, and include a description. Enough photographs should be taken to adequately
document the damaged as well as the undamaged portions of the item.
Overview as well as close up photographs should be taken, whether they are determined to be covered
or not.
Do not comment on whether or not something is covered by the policy in the photo captions.
Submit the following photos on all losses:
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Elevation photos - north, south, east, west elevations of the risk
Overview of all slopes and test squares
Close-up photos of most severely damaged shingle(s)
Damage or lack of damage to soft metals, screens, gutters, etc.
Shingle and pitch gauge on roof
Showing evidence of single or multiple layers of roofing
Interior attic showing type of roof decking
Interior attic showing any evidence of interior damage or ongoing leaks
o NOTE: a photo of the HVAC system condensation pan (drip pan) is needed when interior
water damage is reported/claimed near the condensation pan.
Overview of all interior rooms damaged or not, and a close up photo of damaged areas
Personal Property when applicable
Roofs of other nearby structures to document damage or no damage
The Estimate should be written in the same order that the photos are taken above.
Estimating
Adjusters are expected to create their own estimates based on damages observed during the inspection.
If you need to consult with a contractor, jointly inspect the loss with an independent contractor assigned
by the Inside Desk Claims Examiner. You should never recommend contractors to the insured. If asked,
inform the insured that you are not recommending or hiring a contractor—it is the insured’s choice and
obligation.
There should be a separate estimate per item of insurance involved. Estimates should be clearly marked
as to which item they represent (i.e. Item 1 - dwelling, Item 2 – detached garage etc.). Split your items
within the Xactimate Claim tree applying proper coverage limits and deductibles to the applicable item
number. Estimates should begin with the exterior damages, followed by the interior. The photos should
be in the same order as the estimate is written and should be labeled to match the corresponding areas
in the estimate. A properly labeled overview photo is required for all rooms, including the attic.
Estimates should reflect the reasonable cost to repair covered damage with materials of like kind and
quality at the time and location of the loss and any applicable depreciation. Apply the proper price guide
for the area using the date of loss to price point the estimate. Apply the proper tax rate for residential or
commercial construction. Consider loss history when you are writing your estimate, making certain you
do not allow for damage that has been paid for in prior claims. The Inside Desk Claims Examiner will
provide prior claim reports for comparison.
The Field Adjuster should include in their estimate any damage identified during the inspection that is
consistent with a named peril. The Field Adjuster should include in their General Loss Report any
damage identified during the inspection that is not consistent with a named peril.
Adjusters in the field do not have the authority to discuss what damages are covered or not covered
with the Insured; this is the responsibility of the Inside Desk Claims Examiner. The Field Adjuster’s
responsibility is to make a thorough property damage evaluation and submit their recommendations to
the Inside Desk Claims Examiner, who will review applicable policy provisions to determine the
disposition of the claim.
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Diagramming and Measurements
Diagrams with measurements are required on all field adjusted losses.
The computer generated diagram and measurements for any damaged room or area must be
uploaded with the Xactimate estimate.
Measurements should be rounded up to the nearest inch.
Note the correlation of any interior damage on the diagram or sketch to the exterior damage.
o Example:
Debris Removal:
Disposal should be included in the estimate when appropriate if the local waste collector will not
remove the debris from the Insured’s curbside. Before allowing for disposal, the Field Claims Adjuster
should review which line items already include it.
The "Remove" operation includes putting the materials in a job site receptacle, so using "Remove"
would not be a sufficient allowance for debris removal if the local waste company would not take it. If
estimating for general demolition using labor hours, it is inappropriate to use the "Remove" operation in
Xactimate.
Like Kind and Quality
All estimates should reflect replacement of damaged materials with the same materials and level of
quality. If the damaged material is no longer manufactured, use the closest available materials and
quality but in no case use materials of lesser quality.
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There is one scenario that TWIA and TFPA allows for an “upgrade” of materials. Due to the limited
availability of 20-year 3-tab shingles, TWIA and TFPA allows for their replacement with 25-year 3-tab
shingles when a covered loss exists.
Matching
TWIA & TFPA policies do not provide coverage for perfect matching of shingles, siding and other items
unless there is a reasonable basis to conclude mismatching will appreciably diminish market value after
repairs are completed.
A Field Claims Adjuster should consider whether or not any significant diminution in market value can be
avoided by providing for matched shingles, siding, or components for single or multiple slopes, sides, or
areas within a line of sight.
Natural Breaks
The Field Claims Adjuster should allow for repairs to adjoining areas if there is no natural break between
the damaged and undamaged areas. Adjoining areas are connected rooms or elevations with no natural
break to separate the rooms or elevations.
A natural break separating interior rooms could be a wall separating multiple rooms, a soffit wall/ceiling,
a doorway, a transition strip, differences in surface material (floor, wall, ceiling), or floor levels (1st story
vs. 2nd story). A natural break on the exterior of the home could be a different directional roof slope or
elevation.
Insured Completed Labor Hours/Repairs
For the customer’s labor to perform general clean up or temporary repairs, use the LAB LBR selector
code in Xactimate. If the scope of a repair job cannot be accurately estimated in Xactimate, use skilled
labor hours and add an estimate line item note (F9 note) in Xactimate.
If the customer repairs a damaged item and it is a quality, permanent repair (not a temporary repair,) an
estimate should be written in Xactimate for what it would cost to hire a professional contractor to
perform the work. In no case would TWIA or TFPA pay a customer more than what it would cost for a
contractor to do the same work.
Permits
Permits should be estimated and included in the estimate. Because permit fees vary greatly, any actual
permit fees in excess of the estimated fees should be submitted for supplemental and timely payment.
Overhead and Profit
Overhead and profit should be included in an estimate where the customer is likely to require the
services of a general contractor to repair the damage. The Field Claims Adjuster must document the
reasons for their belief a general contractor will be used. Job Personnel Overhead (or Sub-Contractor
O&P) expenses are included in the Labor Overhead portion of each unit price in the Xactware price list.
Factors to consider in making this determination include the nature and extent of the damage, the
number of trades needed to make repairs, the degree of coordination or supervision of trades required
to make repairs, the opinions of subcontractors, general contractors and other experts about industry
standards, and whether a repair estimate lists overhead and profit.
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On claims that warrant general overhead and profit, Field Claims Adjusters should include O&P as a
separate Xactimate line item at the end of the estimate (10% overhead and 10% profit = cumulative
21%) and apply to all building items and trades, including roofing and fencing, when supervision or
coordination of the item or trade is reasonably required by a general contractor. If it is necessary for a
general contractor to supervise or coordinate all trades, including roofing and fencing, explain why in
your report to TWIA or TFPA. When applicable, general overhead and profit is considered part of the
repair/replacement cost and is NOT depreciable.
Sales Tax
Sales tax should be added and separately identified on all estimates, as appropriate. Please consult the
Texas Comptroller’s website for taxable services and materials:
http://www.window.state.tx.us/taxinfo/sales/faq_collect.html
Examples of taxable items include: materials on repairs; labor on non-residential repairs (excluding
property used as a family dwelling such as apartment complexes, nursing homes and retirement
homes); personal property repairs; waste removal from real property. Tax should not be added to
estimates for tax-exempt entities, such as schools, government or non-profit organizations that have a
tax exempt certificate. The Field Claims Adjuster must verify this. Sales tax is not depreciable.
External Damages
Determination of Cause of Loss:
Weather reports
o TWIA only provides coverage for losses caused by the perils of wind and/or hail. Weather
reports can help determine if high winds or hail has affected a particular area or property.
o If available, use location-specific weather reports to confirm the date of loss and peril(s)
involved for all TWIA and TFPA losses where weather is suspected as a cause or contributing
factor in the loss.
o Atmospheric and Environmental Research, Inc. (AER) is the preferred weather history report
for both TWIA and TFPA. TWIA and TFPA agreements with AER stipulate that there should
be an AER report in every wind and hail claim automatically, typically within 1-2 days of the
assignment being generated.
o If an AER report is unavailable, notify the Inside Desk Claims Examiner immediately.
o Copies of applicable weather reports must be included with the Field Claims Adjuster’s
report.
Utilization of Experts
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o An expert(s) may be needed for claims where the cause of loss or damage may be difficult or
inappropriate for the Field Claims Adjuster to evaluate. As soon as the need for an expert is
identified, immediately contact the TWIA/TFPA Claims Examiner assigned to the file to
discuss the hiring and use of all experts.
o Where a decision is made to utilize experts, you must discuss with the customer the reasons
behind the need for an engineer or other expert(s) to assist in the evaluation of their claim.
Roof Inspector Safety:
Safety comes first and you should never attempt to access any roof when, in your professional
judgment, it would not be safe to do so.
Ground level visual inspections are not accepted. You should notify the Claims Examiner if you
cannot safely access the roof. Appropriate assistance from a roofing or other paid professional may
be used to access the roof, but only with prior approval from the Claims Examiner. In all other
situations, you are expected to personally complete the roof inspection.
If the roof is too steep or high for you to perform an on-roof inspection, authorization must be
approved from the Claims Examiner and documented in the claim file prior to having a paid
professional complete the roof measurement and inspection. You are still expected to complete the
roof estimate and all other aspects of the claim.
General Roof Loss Guidelines:
Roof inspections are required on all field-adjusted roof claims.
TWIA & TFPA use EagleView as their aerial imagery/CAD measurements provider. Use roof “CAD”
diagrams and measurements to establish roof measurements and as needed for diagrams. You are
not required to physically measure the roof when the EagleView report has provided this
information.
When Eagleview is not available, measurements must be taken or verified manually and sketched in
Xactimate.
The Field Claims Adjuster report must include the type(s) of roofing, age of roof, slope pitch, and the
number of layers of roofing.
Replacement materials must be of like kind and quality. Identify and document the type, weight,
and style of the roofing material being replaced. Do not rely on the use of a roof gauge to identify
shingle type; hail-impact resistant shingles and other more recent types of shingles may not be
properly measured by the roof gauge.
Hail Damaged Roofs
When adjusting claims for hail damage to roofs, evaluate and document evidence of damage or “hail
hits”:
A “hail hit” is defined as functional damage to the roofing material. Specifically, functional damage
of roofing material is a reduction in water-shedding capability or expected long-term service life.
Composition shingles are functionally damaged when they are fractured by hailstones. The damage
is typically immediate and visually noticeable. The fracture may also be noticeable by feeling the top
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and bottom surface of a shingle. A fracture from hail is not always apparent in the bottom surface
of a shingle.
10’x10’ test squares for each elevation (North/South/East/West), should be measured, if applicable.
If it is not feasible to mark off a 10'x10' area due to the size/shape of the slope, mark out a 100 SF
area of a different shape that fits in the surface area.
Since hail damage on a roof can vary from slope to slope depending on the pitch, condition of the
roof, protection offered by trees and buildings and the direction of the hail, you should complete
test squares on the appropriate number of slopes to evaluate the damage to the entire roof.
Count and document the number of damaged shingles within the test square.
Document all test squares with annotated photos and upload with the Xactimate estimate.
Damage is determined by the number of damaged shingles, not individual tabs on 3-tab shingles.
Once the amount of hail hits are noted, then consider the age, condition and reparability of the roof
or slope.
Evaluation of hail damaged roofs:
Granular loss alone generally does not constitute damage by hail to composition or flat roofs.
Composite shingles damaged by hail typically show “bruising”.
Metal roofing damaged by hail typically shows dents.
Tile roofing damaged by hail typically shows cracks in the damaged area.
Wood shake roofing typically show splits, splinters, or dents, with appropriate aging for the time of
loss.
Wind Damaged Roofs
Wind damage is evaluated differently than hail damage. Wind damage typically includes tearing,
bending, and bruising to shingles. Wind damage to tile roofs can consist of tiles being blown loose
from the mortar patty or nails or tiles damaged by flying debris.
In the absence of other covered damage, lifted/non-sealed tabs alone are not necessarily indications
of wind or other damage.
Tile roofs are generally designed and installed to allow some movement without damage.
Without visible damage, a report of vibration or chattering will generally not qualify as actual
physical damage.
For claims involving Unsealed Shingles, please note that TWIA Policies cover only damage caused by
windstorm or hail. A composition shingle that was properly sealed prior to the storm and then is
unsealed by windstorm is covered damage. Properly sealed composition shingles are intended to
resist significant wind events. However, some composition shingles may not seal at the time of
installation for reasons such as seal strip contamination, installation errors, manufacturing defects
and cold weather installation.
Roof Loss Cost - Estimating Guidelines:
Field Claims Adjusters are expected to prepare computer-generated estimates on all losses, as
appropriate. Xactimate has been selected as the current property estimating platform for TWIA &
TFPA claims.
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In certain cases, the individual facts of the loss and damages present may require an estimate to be
written differently than these guidelines suggest. Throughout this guide, for any exception or
deviation, the Field Claims Adjuster is expected to justify such deviations and document them with a
line item note (F9) in the Xactimate estimate and to notify the Claims Examiner as appropriate.
The building estimate should reflect the type of building involved, type of construction, dimensions
of the damaged areas, total square footage, replacement cost of the damaged items, and actual
cash value of the items when applicable. On all dwelling estimates written on a replacement cost
basis, actual cash value should be calculated. The estimate format must display in a room-by- room,
line-by-line basis and utilize unit-cost pricing with line-item depreciation, when applicable.
If an item is not found in the Xactimate price guide, a local price may be used if documented and
reasonable. For items that appear to be priced incorrectly based on the quality allowances in
Xactimate, have localized price anomalies, or have grade differences, you are encouraged to use
time and material estimating for the item and document how the price was created. Such methods
may be necessary for unusual or commercial items or while working in areas with access issues. You
should add the new line item under the appropriate trade for the item. Include a line item note (F9)
in the Xactimate estimate to explain the reason for the deviation. Base service charges are included
in the unit pricing.
Xactimate will attach a local pricelist and you should verify that the correct pricelist is attached
based upon the location of the property being estimated.
The most current price database should be used for the estimate. Be sure to use the price data base
for the loss location closest to the loss location from within the loss state.
It is not TWIA’s or TFPA’s general practice to accept contactor or public adjuster estimates as the
means to determine property damage values as the Field Claims Adjuster has a responsibility to
determine the cost of repairs. However, if the Field Claims Adjuster writes an estimate and finds an
estimate submitted by a contractor or public adjuster is in line for the same scope of repairs, with
prior approval from TWIA, settlement may be made based upon the submitted estimate. The
comparison estimate must be clearly labeled and uploaded into the file to document the basis for
the settlement.
Repair vs. Replacement – Always consider roof material “brittleness test.” If a roof was not
repairable at the time of loss, it should likely be replaced. If shingles crack or tear, the roof cannot
likely be repaired.
On a repair to a wood, tile or composite shingle roof with damage scattered across the roof the Field
Claims Adjuster should use a “per shingle/tile/shake price”, depending on the condition of the roof.
“Per square” price should be used if the damage is in concentrated areas.
When most or all of an entire slope of roofing material is blown off, the tear-off allowance should be
reduced or eliminated depending on the circumstances.
Steep charges should be used on roofs with a slope of 7/12 pitch or greater.
Multiple story charges should only be used on roofs that are greater than two stories high.
Steep and/or multiple story charges are calculated on the square footage of the slope(s) involved.
Actual measurements on roofs are to be used for tear-off.
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For multiple layers, add first layer as roof tear-off allowance and the second layer tear-off on a
separate line of the estimate as removal of an additional layer.
Except for metal roofs, Xactimate line item pricing includes haul off, so no separate allowance for
dumpsters should be allotted unless there are unusual circumstances. However, if multiple trades
are in the estimate, a dumpster charge may be needed to accommodate repairs.
When paying to replace roofing use separate line items for the “Remove” and “Replace” operations.
The “Remove” line item should allow for the actual square footage with no waste and no rounding
to the nearest bundle.
Additional items to consider are: ridge cap, metal valley, plumbing sleeves, chimney step flashing,
skylights, vents, felt, drip edge, pipe jacks, cap sheet (tile), removal and reset of A/C unit, cooler, or
antenna attached to the roof, access charge, and debris removal, as appropriate.
o NOTE: the ridge cap is included in the waste factor for 3-tab shingles on full slope
replacements as they are cut from the field shingles used by the installers. When replacing
one or more slopes with 3-tab shingles, there should be no separate charge for ridge cap.
High profile, wood, tile and metal roofs may have additional charges for ridge cap, when
necessary. Any deviation must be approved by TWIA/TFPA.
Roof Waste Factors:
10% waste factor on gable roof replacements.
15% waste factor on hip roof replacements and may be appropriate on more intricately designed
roofs with multiple roof lines, valley, or dormers.
10% waste factor when replacing one slope.
Add linear feet when replacing the ridge cap.
5% waste factor should be used for a flat roof and rounded up to the next square.
20% waste factor for tile repairs on an individual basis to allow for tile breakage during installation.
Depreciation:
Good judgment should be used when determining the appropriate depreciation to apply. Consider
all factors, including the quality of the roofing material, its life expectancy, age and overall condition.
Do not apply depreciation to labor, roof tear-off, or overhead and profit.
Depreciation should be calculated and applied on an item-by-item basis using appropriate guidelines
and methods, which may include depreciation tables, reasonable life expectancy, overall condition
of the roof at time of loss, market value, and other reasonable methods under a broad evidence
rule.
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Repairs of covered damage should never be depreciated.
Evaluation of Losses by Roof Type:
Flat Roofs
On built up roofs, unless evidence is presented to the contrary, 3-ply roofing should be used (plus
any applicable ballast).
TWIA & TFPA do not recognize the Vacuum Uplift Test as a valid way to determine if an existing flat
roof is damaged by wind since this test is not an industry standard for identifying hail or wind
related damage. If asked to consider such test results, TWIA may consider utilizing an expert or
engineer to interpret the test and to assist in the property damage determination or review.
Tile / Slate Roofs
Tile (including but not limited to concrete or clay) roof losses require detailed inspections by the
Field Claims Adjuster.
Tile roofs can be repaired in many situations when the Field Claims Adjuster can determine the
manufacturer, profile, and design of tile roofing. The Field Claims Adjuster should independently
verify that a tile is no longer available and document the efforts to identify the tile in the claim log.
The “per tile” price in Xactimate includes labor to remove and reset tiles around the one that is
being replaced.
When inspecting a tile roof for damage, the Field Claims Adjuster should inspect for missing,
cracked, or displaced tiles. There must be a covered cause of loss to pay for the repair.
Loose tile that has become un-bonded from the mortar patty but has remained in the same place is
generally not storm damage.
Metal Roofs
Some metal roofing requires detaching and resetting to the nearest edge due to the style and
installation method of the roof.
Wood Roofs
Where the customer indicates a desire to replace the wood roof with available alternative roofing
materials the Field Claims Adjuster must seek direction from the TWIA/TFPA Claims Examiner and
their manager before offering any alternative solutions.
Additional Roof Loss Evaluation Considerations:
Nailable Surface
On some occasions, a claim is presented by a customer to remove and replace an underlying surface
material that is not damaged by a covered cause of loss. TWIA & TFPA do not cover an underlying
surface if it is aged or has a defect not attributed to a covered cause of loss unless the outer layer of the
roof was damaged by a covered peril. In the event of a covered loss to the outer surface, TWIA will then
pay for a nailable surface due to a defective or unusable underlayment.
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An example of this would be if there is covered damage to the roof covering (shingles, tile, wood shakes,
metal, etc.) and we determine that the roof decking or spaced decking is rotted. In this example, the
policy generally would owe to replace the rotten roof decking, or spaced decking (and thus provide a
nailable surface to expedite the repair or replacement of the roof).
Wood Roof as a Decking Material
In an effort to improve the consistency of our estimates and payments to our customers, TWIA & TFPA
are clarifying the way its estimates are written with respect to wood shake/shingle as an underlying
layer. As of 11/7/2011 all roofs that are damaged as a direct result of windstorm or hail with wood
shake/shingle as an underlayment are to be written as follows:
1. Removal of the damaged composition shingles due to direct loss from windstorm or hail.
2. Removal of all additional layers of composition shingles, as specified in the code requirement to
remove all layers if two or more layers are present.
3. Removal of the wood roof shingles serving as a decking material for the composition shingles, as
specified in the code requirement to remove all layers if two or more layers are present.
4. Replacement of the wood roof decking with code compliant ⅝ sheathing as specified in the
code.
o Depreciation is based on the age, use, quality and condition of the top layer of composition
shingles.
5. Replacement of the composition shingle roof including a 15lb felt underlayment, 2 layers of 15lb
felt underlayment if pitch is 4/12 or below.
o Depreciation based on the age, use, quality and condition of the top layer of composition
shingles.
Based on the above scenario, the estimate should resemble something similar to the example below.
Please keep in mind that this is an example only and does not contain all materials that are normally
found in a roofing estimate.
Multiple Overlay of Roofing Materials
TWIA/TFPA allow for the cost to tear off multiple layers of roofing materials and to re-deck the roof if
necessary.
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Footfall
If the Field Claims Adjuster causes footfall damage to a roof during an inspection:
Add the number of shingles, shakes, or tiles damaged by footfall plus the number of shingles,
shakes, or tiles damaged by a covered peril to the estimate. The total damage is subject to the
deductible.
If there is no damage to the roof or the damage is below the deductible and the Field Claims
Adjuster damages the roof by footfall, then the Insured is reimbursed for the footfall damage repair
without taking a deductible.
Siding/Paint/Stucco
These claims should be evaluated on the basis of each individual elevation:
Only the damaged elevations should be repaired or replaced.
When one elevation of siding is replaced, TWIA does not automatically owe to replace any other
elevations in order to match the new siding (see "Matching" topic).
When there is an insulation board or house wrap behind the siding, the insulation may be damaged in
the process of repairing the siding. In these cases; the insulation board or house wrap should be
included in the estimate.
When diagramming exterior wall damage, the Field Claims Adjuster should include both damaged and
undamaged elevations.
Pools
Filling
If an insured’s pool is leaking as the result of a covered loss, coverage for the pool and water within may
be dependent upon the policy and cause of loss involved. While many pools are covered under the
Other Structures section of the policy, the water contained within pools is considered Personal Property
(Coverage B).
When estimating to drain a pool to perform covered repairs, the Field Claims Adjuster should separately
estimate the cost to re-fill the pool with water and the appropriate chemicals. The cost of the water can
be obtained in various ways; from the local water authority, from a pool company or from the Insured’s
water bill.
The cost of the water and appropriate chemicals should be listed separately as it will be considered for
payment under any available Personal Property Coverage.
Pool Decking
The policy must be reviewed to determine if there is coverage for pool decking.
If concrete pool decking is damaged by a covered cause of loss, the repairs should be estimated similarly
to sidewalk/driveway repairs. However, the extent of repair to any deck surface material (Cool deck,
etc.) must also be evaluated to provide for a uniform appearance.
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Fences
Fences should be measured to the nearest linear foot.
Chain link fences can be replaced on a per linear foot basis.
Wood, aluminum, and vinyl fences can generally be replaced in 8 foot sections (Or the actual length
between posts for the fence section).
Blown down wood, aluminum, or vinyl fencing can often be reset depending on the severity of
damage to the panel.
Fence posts should only be replaced if there is covered damage to the post.
TWIA only owes for the Insured’s interest of a common fence. (i.e. ½ of a “good neighbor” or other
shared fence)
Since the Xactimate price for fence removal includes the cost to place the damaged fence in a job
site waste receptacle, a dumpster or pickup truck line item should be added only when the city will
not remove fence debris placed for garbage pickup. Typically, one pickup truck load will be sufficient
for the removal of 4-5 sections of fence.
If depreciation applies to the damaged fence, the Field Claims Adjuster should determine if the
repair or replacement of the damaged portion of the fence will place the Insured in a better position
than before their loss. If betterment is involved, then the fence repair/replacement will need to be
depreciated.
Sheds, Outbuildings, and Other Structures
Determine if the structure qualifies as an Other Structure (Coverage A) or Personal Property (Coverage
B):
The Structure qualifies as an Other Structure (Coverage A) when:
o It is a permanent part of the realty, has a foundation, or has tie downs or is in some other
way affixed to the realty.
o If it was removed it would deface the property, such as when it has been landscaped
around making it impossible to be easily removed.
The structure qualifies as Personal Property (Coverage B) when:
o It is manufactured to be easily moved such as pre-fabricated plastic storage units or the
shed is placed on skids for easy transport
Pricing for sheds, other outbuildings, and other structures:
When the price for a prefabricated structure is available in Xactimate, the Field Claims Adjuster
should match the features in the Xactimate Selector Code with the features of the damaged shed.
If the Insured's structure has more features than the Xactimate structure a “stick built” estimate
should be written to reconstruct the structure.
When appropriate, the Field Claims Adjuster should consider using general demolition rather than
using the "remove" operation in Xactimate.
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Retaining Walls
Claims for damaged retaining walls should be thoroughly investigated as they are typically damaged
by perils such as earth movement, wave action or surface water which are not covered by a
TWIA/TFPA policy.
Generally, it is appropriate to hire an expert to perform a professional evaluation of the cause of the
damage especially where suspected non-covered causes of loss contributed to or caused the
damage in any way.
Interior Damages
Interior Diagrams
The diagrams should include the room measurements, ceiling heights, any relevant offsets, and any
cabinets or built-ins.
Kitchen and bathrooms require detailed diagrams of appliance, fixtures, and cabinets.
Wall openings larger than 50% of the area should be deducted when estimating the replacement of
wall finishes or surfaces.
The diagram with measurements should be completed for the damaged area(s) and any area where
the same damaged product was installed to continuous surfaces such as floors, carpeting, wallpaper
or siding.
If the building or dwelling has multiple stories and a thorough inspection reveals the damage is
confined to one story (or level); then only the story damaged would require full measurements and
a diagram.
Drywall
There are many types of drywall, so the Field Claims Adjuster should determine the correct grade and/or
makeup of the wall or ceiling surface.
Generally, drywall installed on ceilings is 5/8” thick, wall surfaces is 1/2” thick.
Types of drywall include: fire rated drywall, Type-X, and drywall located in moisture prone areas.
In moisture prone areas, such as a bathroom, the Field Claims Adjuster would use green- board
unless the investigation shows it was not present prior to the loss.
The Field Claims Adjuster should estimate the actual drywall material damaged and not round up to the
nearest whole sheet of drywall. It may be necessary to allow for some additional repair area as a
perfectly square repair without waste is generally unlikely.
It is TWIA/TFPA’s general policy to cut out and remove the ceiling/wall surface exposed to water
damage rather than sealing and painting. For minor water stains that has already dried, sealing and
painting may be appropriate.
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Plaster
Since there are many types of plaster/backer material/lath combinations, the Field Claims Adjuster
needs to determine the correct grade and/or makeup of the wall or ceiling surface.
The most appropriate way to determine which Xactimate selector code to use is to examine the
backer material or lath behind the plaster.
Wood lath is common in homes built before the 1940s. Metal lath is common in homes built after
the 1940s. The most common backer material used today is 1/2" gypsum board.
The Field Claims Adjuster would estimate replacement of like kind and quality. If the Field Claims
Adjuster is unable to determine the type of material, 1/2" gypsum board should be used.
When estimating to repair an isolated area of plaster on a wall or ceiling surface, estimate for the actual
square footage of repair and include for a thin coat of plaster over the entire surface of the wall or
ceiling that is being repaired.
Wall Coverings
Paint
On damaged walls that require repainting, it is usually necessary to repaint adjacent walls for a
uniform finish including any of the adjacent walls that continue without a natural break.
When drywall is replaced, the newly installed drywall should be painted with a sealer and all walls
painted with one coat of paint.
Rooms with large or long walls and those with large amounts of natural light such as a great room
that may require more than one coat of paint.
All openings over 50% of area being repaired or areas not requiring painting (such as behind
cabinets) should be deducted when estimating for painting.
When plaster is replaced, all repaired walls or ceilings would also require two coats of paint due to the
differing absorption rates of plaster and drywall.
Extra coats should be allowed when walls are custom painted, have an unusual finish, or when there is
an appropriate reason.
Content Manipulation may be used when:
It would be unacceptable to move the contents to the middle of the room and cover with a drop
cloth. Rooms with large numbers of items (small figurines) on the walls or with very large items
(piano) may require additional content manipulation.
An allowance for extra masking may be appropriate in rooms with chair rails, picture rails, or base and
crown molding. Switch/outlet covers and dropping of standard light fixtures are included in the paint
price in Xactimate.
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Wall and Ceiling Texture
The accepted repair technique for popcorn ceiling texture is to scrape and re-texture the entire
ceiling. When applying popcorn texture to new drywall, the drywall should first be sealed as a
separate operation to allow the popcorn texture to adhere to the new drywall.
Many of the hand textures used on ceiling surfaces and walls can be spot replaced and the texture
blended into the existing texture. It may require repainting of the entire surface area for a uniform
finish. The Field Claims Adjuster needs to evaluate each claim for possible repair techniques.
Wallpaper
If any portion of wallpaper is damaged, the wallpaper to all adjacent walls must be removed and
replaced. Should any of the adjacent walls continue without a natural break into any adjoining
room(s), the adjoining room(s)' walls should also have the wallpaper removed and replaced.
Since waste is included in the wallpaper price in Xactimate; no additional waste should be calculated
except in unusual circumstances
The Wallpaper price in Xactimate does not include prep work to install the new wallpaper when it is
installed over surfaces where the old wallpaper was located.
Flooring
Carpet
Carpet replacement should be estimated using the drop and fill method as this allows for the most
efficient use of a roll of carpet by calculating how much square footage would be needed based on the
seams and direction the carpet fills the room.
Field Claims Adjusters must identify the quality of material, the appropriate width for the replacement,
and number of seams in a room. The Field Claims Adjuster should not estimate for more seams than are
currently used. It is acceptable to allow for content manipulation in order to replace carpeting. Carpet
should be replaced to a natural break such as a doorway, flooring material transition, etc.
The grade of the damaged carpet is an important factor in estimating the replacement cost. The
different grades/styles of carpet can be found in Xactimate along with images that show specific
examples.
When carpet has been exposed to water, the Field Claims Adjuster should assess if the carpet can be
salvaged since a wet carpet does not always require replacement. It is acceptable to have carpet cleaned
and deodorized if the carpet has not been permanently stained or delaminated.
The Field Claims Adjuster should determine the potential of having the carpet cleaned by a professional
carpet cleaning service prior to allowing replacement of the carpet. When the carpet can be saved, an
estimate to detach and reset the carpet, to replace the carpet pad as well as an allowance for germicide
may be required.
Wood Floors
Field Claims Adjusters must distinguish hardwood floors from laminate floors due to high variances in
price, quality, and repair options depending on type and quality of the flooring. Generally, repairs to
damaged hardwood floors can be isolated to the damaged planks. These planks can be removed and
replaced and the floor sanded, stained, and refinished to match. It is important to identify the cause of
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loss to wood floors since wood flooring can be damaged by non-covered causes such as warping from
humidity, surface water, improper installation, etc.
The Field Claims Adjuster should evaluate the level of damage to the hard wood floors as hardwood
floors can be sanded and refinished without replacing the actual wood. This is dependent on the extent
of damage and the number of time(s) the wood floor has previously been sanded and refinished.
When estimating to sand, stain, and finish hard wood flooring some items that need to be taken into
consideration are:
Refinishing the floor up to a natural break
Content manipulation as appropriate
The machinery used to sand, stain, and refinish wood floors may mar baseboards causing them to
be damaged, appropriate repairs or replacement should be allowed
A light post repair cleaning may be necessary
Laminate flooring is more difficult to repair as it cannot be sanded. It may be difficult to match laminate
flooring, even if the same brand/type of floor can be obtained, since the new floor will be from a
different dye lot resulting in a product color that may not match. If the Insured has any extra materials
left over from the original installation it is appropriate to estimate for a repair.
For engineered hardwood flooring, the type and manufacturer of engineered flooring often determines
the reparability. Some manufacturers give a warranty of 1 to 3 sandings for the lifetime of the
engineered wood. The Field Claims Adjuster may need to research to determine if the engineered
flooring can be refinished.
When replacing wood floors, it should be replaced to a natural break (doorway, flooring material
transition, etc.). It is generally difficult to stop at doorways unless there is a clear transition. If strip
flooring runs under a door, proper estimating may require an estimate to extend into another room.
Tile Floors
Tile floors are resistant to water; therefore, replacement should not be necessary unless the mortar bed
is compromised or it is cracked from a covered peril.
If tile must be replaced, the Field Claims Adjuster should research to determine if replacement tiles can
be located or manufactured. In addition, the Field Claims Adjuster should ask the Insured:
If they have any extra materials left over from the original installation.
The store where the tile was purchased.
The name and contact information of the company that installed the tile.
If it is possible to repair with matching tiles, it is appropriate to estimate for only the square footage of
damaged tile. If repairs are not an option, then replacement should be made to a natural break.
Sometimes claims are made for discolored tile. Tile by its very nature does not stain. If staining due to a
covered cause of loss is noted, it may be necessary to have the tile professionally cleaned to determine
if truly stained. Discoloration of grout can be cleaned very easily. If the discoloration is a result of a
covered loss, tile can be re-grouted without having to replace the tiles.
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Hollow sounds under tile are not necessarily an indication of damage.
Vinyl Floors
The drop and fill method should be used for computing the replacement of vinyl flooring sheet goods.
These sheet goods come in 6’ and 12’ wide rolls. Damage due to tears, burns, and stains caused by a
covered loss generally requires replacement of the vinyl floors. Vinyl tile can sometimes be repaired if
the materials are still available.
Multiple Layers of Floor Coverings
If there are multiple layers of flooring, only the top layer should be considered for like, kind and quality
replacement.
If an Insured has laid carpet over wood plank flooring, the wood floor may be considered abandoned
and we would only owe to replace the carpet. If there is material under the carpet that was also
damaged it should be considered on a functional basis.
If the wood plank floor was damaged and required replacement it may be replaced to provide a
solid sub-floor and restore the Insured to pre-loss condition, but the abandoned wood floor should
not be refinished.
If an Insured chose to leave an old glue-down carpet in place and laid new carpet over the top of the
old carpet, this Insured has abandoned the glue-down carpet as a functional carpet, but has retained
this carpet as a functional pad for the new carpet. If there is covered water loss that damages both
carpets, TWIA/TFPA may consider the new carpet for replacement and the abandoned carpet that
was also water damaged may be considered for removal and replacement with a carpet pad.
Electrical
Testing
There must be some evidence of electrical damage before paying for exploratory testing. If the damage
is evident but not physically visible, have the Insured get an electrician to give them an estimate along
with the cause of loss.
Water Damage to Electrical Fixtures
If there is evidence that water has passed through an electrical fixture, such as a light or ceiling fan, it is
generally most cost effective to remove and replace the light fixture. For high value fixtures,
consideration may be given to hiring an electrician to determine if the fixture(s) require replacement.
Insurable Interest
The insurable interest of certain electrical items must be verified with local municipalities/utility
companies prior to including them on estimates. The Field Claims Adjuster should verify that the Insured
is responsible for that particular electrical item before we pay to repair or replace it.
HVAC
Reparability Reports
For a loss to an A/C unit, the Field Claims Adjuster may consider getting a cause of loss and reparability
report. In all cases, the Field Claims Adjuster will need basic information on the HVAC unit such as make,
model, age, and SEER rating.
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Reparability
Replacement of an air handler when a compressor is damaged is not always required. Unless there is a
justifiable reason covered under the applicable policy to replace the air handler and the compressor; the
policy will only pay for like, kind and quality replacement of one component.
If a contractor states they must replace multiple components in order to guarantee the work,
TWIA/TFPA’s policy covers only the damaged item, not the added component needed to satisfy a
warranty requirement. If the claim is for replacement of an air handler, due to direct damage of a
compressor, the Field Claims Adjuster must verify and document the reason(s) for including both
components in their estimate.
If repairs require multiple components due to an ordinance or law the Field Claims Adjuster must
determine if the policy contains provisions or endorsements which provide coverage for any repair or
replacement requirements mandated by any ordinance or law.
If the replacement unit is an upgrade, then the added costs to upgrade must be documented and
deducted from the estimate of damages.
Ductwork
Prior to replacing ducts on a covered loss, the Field Claims Adjuster should explore all remediation and
cleaning options available.
Remediation
Water
On claims that have extensive interior water damage, it is recommended that the Field Field Claims
Adjuster include water remediation in the estimate if the Insured has not already contacted a water
remediation company.
If the Insured has called out a remediation company before the Field Claims Adjuster has had the
opportunity to inspect, then the Field Claims Adjuster should write a comparative estimate once the
remediation bill is received in order to determine whether the invoice is reasonable. This comparison
estimate should be clearly labeled and uploaded with the Xactimate estimate.
It is extremely important for the Field Claims Adjuster to monitor remediation efforts so that fans,
dehumidifiers, negative air machines, etc. are used appropriately.
Mold
If the property has both covered water damage and non-covered mold growth, the adjuster’s estimate
should include the cost of ordinary water damage repairs, not the increased cost associated with mold
remediation or testing. On a covered loss where mold is present, the Field Claims Adjuster should
immediately notify the Insured of the mold and their responsibility to mitigate any further damage.
Asbestos
TWIA/TFPA’s policies do not cover any loss or damage caused by or resulting from asbestos. We do
cover direct physical loss caused by windstorm or hail to covered property containing asbestos
materials; however, we do not cover the additional cost or expense to test for, monitor, clean up,
remove, contain, treat, abate or assess the effects of asbestos or asbestos-containing materials.
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If the property has covered damage to the asbestos-containing materials, the adjuster’s estimate should
include the cost of ordinary repair or replacement, but not the increased cost associated with asbestos
testing, monitoring, containment or abatement.
Contractors
Contractor Estimates
If the customer obtains a contractor estimate for repairs, a comparative estimate must be written to
determine if the contractor’s estimate is reasonable. If the contractor’s estimate is reasonable, the
estimate total must be included in the Field Claims Adjuster's Xactimate estimate as a line item
(Example: a specific line item stating “Estimate from Bob's Roofing - $1200”).
If after completing the comparative estimate the Field Claims Adjuster determines the contractor’s
estimate is not reasonable, they should estimate the damage as they would normally. In both cases, the
contractor’s estimate and the comparative estimate must both be included and clearly labeled in the
claim file.
Hiring a Contractor
The selection of a general contractor or any other professional is solely the responsibility of the
customer. The Field Claims Adjuster must not select or employ a contractor or expert on behalf of the
customer, nor recommend or coerce any customer to utilize the services of a particular contractor.
However, the TWIA/TFPA Claims Examiner is authorized to offer preferred repair provider (PRP) services
to our customers. Customers are in no way obligated to use these optional services to select a
contractor.
Mobile/Manufactured Homes
The attachment of the TWIA 411 Endorsement converts the HB-3 policy to a Manufactured Home Policy.
Please read this endorsement carefully and thoroughly as there are many exclusions for items typically
covered under the HB-3 policy. Wind and Hail continue to be the only covered perils.
Mobile Home Coverage
Only TWIA provides coverage for mobile/manufactured homes. TFPA does not provide
mobile/manufactured home coverage at this time.
Interior
Walls in many mobile homes are constructed of mobile home specific wallboard and not standard
drywall. This type of wallboard should be estimated by the sheet not by the actual square footage.
Newly constructed mobile homes may be constructed with drywall.
Re-leveling
Estimates should include the Xactimate price to re-level the mobile home as well as any applicable tie
downs and anchors. If the concrete piers are shifted, it is appropriate to use the Xactimate line item that
allows for re-setting the concrete piers. The estimate for re-leveling the mobile home should include
detaching and resetting skirting, if it is not already blown off.
If the mobile home is a double-wide, the roof ridge and interior must be inspected for splitting. If the
roof ridge is split, then the Field Claims Adjuster should estimate for roofing repairs and to bolt the two
halves back together. This can be estimated by replacing the ridge board, which would provide for all
access, and jacks for each side of the home.
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When inspecting the mobile home for wind damage, all windows and doors should be evaluated to
determine if the home has shifted.
Xactimate Grades for Mobile Homes
For mobile homes built in the 1970’s and 1980’s, standard grade should be used in Xactimate for
each line item, unless the material has been upgraded.
For mobile homes built in the 1990’s and beyond, average grade should be used in Xactimate for
each line item, unless the material has been upgraded.
Personal Property
Claims that involve personal property are unique. For this reason, the Field Claims Adjuster should keep
in constant contact with the Inside Desk Claims Examiner to report any information they obtain
regarding personal property. The Field Claims Adjuster must contact the Inside Desk Claims Examiner
prior to inspection to receive any special handling instructions regarding the personal property portion
of a loss. The Field Claims Adjuster should address the possible damage to personal property with the
Insured at the time of initial contact to determine the amount and nature of property being claimed.
For all losses, unless specifically directed otherwise, the Inside Desk Claims Examiner will handle the
estimating of the personal property portion of the claim. Field Claims Adjusters should not include
personal property losses in their estimates, nor bill for adjusting the personal property loss. The Field
Adjuster should only include the dwelling and other structures damages in their estimates.
For extensive personal property losses (i.e. fires), TWIA/TFPA may employ the services of a separate
contents vendor to expedite the claim and best serve the policyholder.
The Field Claims Adjuster should not provide a Personal Property Inventory Form to the insured unless
specifically instructed to. The Inside Desk Claims Examiner will address personal property losses by using
a contents vendor to evaluate the loss and will obtain the inventory descriptions directly from the
insured. The Insured should be instructed not to dispose of any damaged personal property prior to a
planned inspection.
The Field Claims Adjuster is expected to document loss of personal property with adequate, annotated,
and clear photos. Photos should include model or serial numbers if available. If it is not possible to take
photos, the explanation should be documented in the claim log.
For electronics, the Field Claims Adjuster needs to determine if a certified repair technician should be
utilized to determine cause of loss and reparability of an item.
Restoration, cleaning, or repairs for clothing, rugs, jewelry, furniture, collectibles, tools or paintings
should be considered by the Field Claims Adjuster prior to making a recommendation for payment on
any of these items.
Submission of a completed estimate should not be delayed pending personal property completion. If a
partial settlement is made, the claim log shall be documented with any outstanding personal property
issues or information relating to the personal property portion of the loss that is forthcoming.
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Special Handling Instructions
If assigned a claim for Theft, Vandalism & Malicious Mischief, or Lightning it is imperative that the Field
Claims Adjuster communicates with the Inside Desk Claims Examiner to receive special instructions. The
Inside Desk Claims Examiner must be contacted prior to inspecting the loss.
Theft and Vandalism & Malicious Mischief
The Field Claims Adjuster should not provide a Personal Property Inventory Form to the insured, as all
contents losses will be assessed by the Inside Desk Claims Examiner. However, upon initial contact prior
to the inspection, the Field Claims Adjuster should ask the insured to compile all supporting
documentation they may have regarding the loss. Supporting documentation that needs to be
photographed can be in the form of receipts, boxes, owner’s manuals, invoices, remote controls, or any
documentation that could prove ownership.
The Field Claims Adjuster is required to photograph every room in the home to document damage or
the lack thereof. For loss by theft, the Field Claims Adjuster should also photograph areas from which
the items were taken (i.e. empty TV stand showing the wires and cables, open china cabinet where silver
was kept, etc.). It is important to use critical thinking when taking these photos. Does the item that is
being claimed fit in this area? Are there any imprints or dust marks showing where the item was? If
there are any inconsistencies, the Inside Desk Adjuster should be contacted as soon as possible to
discuss.
For a loss by vandalism, the Field Claims Adjuster should photograph any damaged personal property
showing as much detail as possible. There should be close up photos of model or serial numbers and any
supporting documentation the insured may have. For damaged electronics or appliances, the Field
Claims Adjuster needs to determine if a certified repair technician should be utilized to
determine/confirm cause of loss and reparability of an item.
The Field Claims Adjuster will need to provide detailed photographs showing the method of entry. If the
door or window has already been replaced, there should be a photo of the repair receipt. Just as any
other claim, elevations, fences, attics, and other structures need to be addressed regardless of damage.
If the insured took photos of the damage prior to the repair, please request copies from the insured, or
photograph them and submit with the estimate.
A police report needs to be ordered by the Field Claims Adjuster within 24 hours of receiving the claim.
The police report should be forwarded to the Inside Desk Claims Examiner upon receipt. Submission of a
completed estimate, however, should not be delayed pending the police report.
A roof inspection is not necessary on a theft or vandalism claim unless it is relevant to the method of
entry or was damaged in some way from the loss. Therefore, an Eagleview report does not need to be
ordered on these claims.
Recorded statements are taken by the Inside Desk Claims Examiners or our Special Investigations Unit,
not the Field Claims Adjuster.
Vacancy
The Field Claims Adjuster should inspect additional elements if the dwelling appears to be vacant. It is
important to note if the electricity is on, and if not, how long it has been off. It is imperative to
photograph every room in the home to allow the Inside Desk Claims Examiner to see what contents are
still in the home (i.e. appliances, cleaning supplies, etc.). If the home is for sale, information on how long
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it has been up for sale, and how long it has been empty of contents should be requested from the
insured.
Copper Wiring on a TDP-1 Policy
In a Vandalism and Malicious Mischief claim including the theft of previously installed copper wiring on a
Texas Dwelling Policy, the estimate written by the Field Claims Adjuster should include the pricing of
copper wiring as it is considered damage to the building caused by burglars.
Lightning
Aside from the required inspection of elevations, other structures, and interior rooms of the home,
when there is a loss by lightning, the Field Claims Adjuster should check all major appliances and
electronics in the home. Even if an insured states that only their tree was damaged, the Field Claims
Adjuster should confirm that TVs, HVAC system, microwaves, stereos, indoor and outdoor lights, etc.,
are in working order.
The Field Claims Adjuster should photograph any damaged personal property showing as much detail as
possible. There should be close up photos of model or serial numbers and any supporting
documentation the insured may have. For damaged electronics or appliances, the Field Claims Adjuster
needs to determine if a certified repair technician should be utilized to determine cause of loss and
reparability of an item.
If the home or a tree was struck by lightning, it is imperative to show detailed photos of the damaged
area. Trees will usually have a unique pattern confirming lightning. If the tree has fallen, include the cost
of removal of the tree. Refer to the policy when considering coverage for replacing trees as there may
be coverage limitations. Inside the home, circuit breakers and outlets throughout the home should be
checked for burn marks.
If there is no evidence of lighting, the Field Claims Adjuster needs to contact the Inside Desk Claims
Examiner immediately. If assistance is needed in investigating the cause of loss, the Inside Desk Claims
Examiner may employ an expert.
Identification of Building versus Personal Property
The following lists are intended to help determine which items are normally considered art of the
Building and which are normally considered Personal Property.
BUILDING ITEMS
Furnaces
Wall mirror permanently installed
Elevator equipment
Fire sprinkler system
Garbage disposal units
Pumps, related machinery
Built-in ranges and stoves
Radiators
Lighting fixtures
Venetian blinds
Central air conditioners
Carpet permanently installed
Built-in dish washer
Hot water heaters (including solar)
Built-in microwave ovens
Plumbing fixtures
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Cabinets
Permanently installed bookcases, etc.
PERSONAL PROPERTY ITEMS
Air conditioner units (not central)
Portable dishwashers
Food freezers (unless built-in)
Refrigerators (unless built-in)
Rugs & Carpet not permanently installed
Clothes washers and dryers
Portable microwave ovens, barbeque grills,
similar items
Outdoor equipment/furniture (check the policy for
details)residence
premises
If instructed to fill out the Personal Property Inventory Form (PPIF), it should be completely filled out for
claims with personal property involved. The PPIF must account for each item with specific details and
quantity of the item. There should not be bulk categories (e.g. two bags of clothes, one box of
miscellaneous items, etc.) as such lump sum categories are highly subjective. The PPIF must be itemized,
reflecting a description of items along with the age, verified replacement cost, and actual cash value of
the item(s). Age, make, model and serial numbers must be provided on all major appliances.
The will be responsible for verifying prices and discuss depreciation, when applicable, with the Insured.
It is not TWIA/TFPA’s practice to accept the Insured’s or their representative’s prices as the only means
to determine settlement value. Personal Property items should not be listed in the Field Claims
Adjuster’s Xactimate estimate.
TWIA/TFPA’s PPIF captures most of the information needed to conclude a Personal Property loss. In the
interest of consistency, TWIA prefers that Personal Property losses be handled with the approved PPIF.
If an Insured or their representative submits a form with the same information as the PPIF the Field
Claims Adjuster may consider using the submitted form rather than require that all information be
transcribed onto the TWIA/TFPA’s form.
Supplements
When supplements are presented to Field Claims Adjusters, the Field Claims Adjuster should
immediately contact the Inside Desk Claims Examiner to determine the best course of action.
Supplements may require closed files to be reopened. Do not reopen a claim file without the direction
of the Inside Desk Claims Examiner.
The adjuster should follow up with the insured to determine the reason for reopen/supplement and to
request and obtain any estimates, receipts, reports, and information that the insured has in support of
his/her claim. Examine these items and make recommendations to TWIA or TFPA.
Salvage
All salvageable items must be noted and any buy-back clearly documented.
Subrogation
All subrogation issues with Building or Personal Property items must be noted in the claim log with the
subrogation explanation and rationale clearly documented. Claims Management should be immediately
contacted on claims where a cause and origin expert would assist in determining subrogation.
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Replacement Cost & Actual Cash Value Losses
Replacement Cost Coverage (RCC)
TWIA/TFPA requires valuations on all items of real property for which coverage is shown on the loss
notice. Field Claims Adjusters should start their evaluation process using the MSB Replacement Cost
Calculators on the TWIA web-site in order to determine the Building Value amount for RCC purposes.
If a customer or their representative questions the replacement cost evaluation process, additional
methods must be considered, including the following:
Replacement (reconstruction) cost estimates generated by other software providers.
An insurance reconstruction cost valuation prepared by qualified appraisers which is specifically
formulated to establish insurance replacement cost rather than market value
Reconstruction cost estimates prepared by licensed general contractors, architects or engineers
which include a contract price for reconstruction cost and an itemized list of home, building or
structure features
A property inspection report dated within the past 12 months ordered by another property
insurance company that includes a detailed reconstruction cost estimate
Actual Cash Value Losses
Many policies have a coinsurance provision that requires the property to be insured to at least a
specified percentage of the replacement cost value of the property insured at the time of the loss. The
coinsurance percentage is typically shown on the TWIA Claim Acknowledgement and Assignment or the
TFPA policy endorsement. The application of any co-insurance provision must be approved by
TWIA/TFPA management before it will be applied.
Recoverable and Non-Recoverable Depreciation
Items Subject to Depreciation
If an item is normally subject to both repair and replacement during the life of the structure, then
the item would be subject to depreciation based upon the remaining useful life, use, wear, condition
and/or obsolescence of the depreciable item. Examples include, but are not limited to, water
heaters, floor coverings, interior and exterior wall finishes, and roofing materials.
If an item is not normally repaired and/or replaced during the life of the structure, then it would not
be subject to depreciation based upon remaining useful life, but would be subject to depreciation
based on the use, wear, condition and/or obsolescence of the depreciable item. Examples include,
but are not limited to; framing, sheathing, drywall, plaster, siding, subflooring, plumbing, electrical,
certain windows or doors, etc.
Depreciation must be documented when applied. Lump-sum depreciation is not accepted; it must be on
an item-by-item basis based on these depreciation guidelines. The evaluation of damages should be
conducted at the time of initial inspection. Generally, no more than 75% depreciation should be applied
to items with remaining useful life. If it is found that more than 50% depreciation is needed, first
consult with the Claims Examiner for approval.
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Depreciation should not be applied to labor only items such as tear out, debris removal, tree removal, or
remove and reset, etc.
Guidelines on Withholding of Recoverable Depreciation
Unless there are hidden damages, or the cost to perform the repairs at a higher cost is justified causing a
supplement; the amount paid at release of the holdback will generally be the lesser of:
The actual amount paid to perform the covered repairs; less the applicable deductible and the ACV
payment
The amount of the recoverable depreciation held back
If there are hidden covered damages discovered after the initial payment, those damages could also be
subject to recoverable deprecation. The Field Claims Adjuster should always consider and evaluate
situations where the actual repair cost is justifiably higher than the initial repair estimate.
Guidelines for use of Non-Recoverable Depreciation
Should you have any questions regarding the evaluation and calculation of recoverable or non-
recoverable depreciation, contact your Supervisor or Manager.
XactAnalysis How-to
The following contains excerpts from XactAnalysis “Help” documents. The screen shots in this document
are generic, and your company’s interface may vary.
Add a document
1. Click Add Documents. The Upload Documents dialog box appears.
2. Click Select Files. Select files to upload.
3. Type a file description in the Description field.
4. Click Complete Upload. The documents appear in the Documents tab.
Note: Once uploaded, documents are permanent and cannot be deleted or edited.
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Request EagleView Roofing Measurement
Send a request to EagleView for roofing measurements for selected assignments in Advanced Search
Results. EagleView is a third party company which analyzes aerial images for each roof and returns a
Sketch back to the adjuster/contractor in Xactimate. For this option to appear, you must have an
account with EagleView, the Request Eagle View Roofing Measurements user right, and a dataset you
have rights to must be set up by XactAnalysis to use the EagleView export. This option is not available
for read-only users.
To send a request to EagleView for roofing measurements:
1. Check the boxes of the assignments for which you want to request EagleView Roofing
Measurements.
2. Select Request EagleView Roofing Measurement from the Select an Action drop-down menu,
and click Go.
3. A confirmation window appears. Click OK.
4. The assignments are exported to EagleView. A notification window appears. Click OK.
QA Approve
Update the QA Approval status of selected assignments in Advanced Search Results to QA Approved.
This option is not available for read-only users.
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To update this status:
1. Check the boxes of the assignments you want to update to QA Approved.
2. Select QA Approve from the Select an Action drop-down menu and click Go.
3. The Update Status to QA Approved window appears (see Figure 15). Fill out the form and click
Update Status. The page refreshes, and the assignment's approval status is updated.
External Data
When reports are ordered from outside XactAnalysis, the information from those reports appears in this
tab. To view a report from outside XactAnalysis, click the External Data tab and select one of the
options.
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Order AER Hail DOL Reports
You can order a Hail Date of Loss report through Atmospheric and Environmental Research (AER) for one
or more selected assignments. When complete, the report appears in the External Data tab in
Assignment Detail. The report displays data for any hail occurrences near the claim location on the date
of loss, the day before the date of loss, and the day after.
To order a Hail Date of Loss report, check the boxes of the assignments for which you want to order a
report, select Order AER Hail DOL Reports from the Select an Action drop-down menu, and click Go.
Order Hail History Reports
You can order a Hail History report through Atmospheric and Environmental Research (AER) for one or
more selected assignments. When complete, the report appears in the External Data tab in Assignment
Detail. The report displays data for any hail occurrences near the claim location on the date of loss. It
also displays data for the last three hail occurrences prior to the date of loss, the next three hail
occurrences after the date of loss, and the most severe hail occurrence.
To order a Hail History report, check the boxes of the assignments for which you want to order a report,
select Order Hail History Reports from the Select an Action drop-down menu, and click Go.
Order Lightning Strike Reports
You can order a Lightning Strike report through Atmospheric and Environmental Research (AER) for one
or more selected assignments. When complete, the report appears in the External Data tab in
Assignment Detail. The report displays data for all lightning strike occurrences near the claim location on
the date of loss. It also displays the distances of the 20 closest lightning strikes from the claim location.
To order a Lightning Strike report, check the boxes of the assignments for which you want to order a
report, select Order Lightning Strike Reports from the Select an Action drop-down menu, and click Go.
XactAnalysis Assignment Workflow
1. A claim is reported to a carrier.
2. The carrier creates an assignment in XactAnalysis.
3. The claim is assigned to the Firm's queue
4. The firm assigns the claim to an assignee (sent to their XactNet address).
5. The assignee (adjuster/contractor) completes the claim in Xactimate and sends it back to
XactAnalysis.
6. Estimate data is added to reports.
7. The estimate is reviewed in XactAnalysis
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QA Approval:
QA Approve the claim from the details tab on an individual claim basis.
When a firm “QA Approves” the estimate in the details tab, all documents that are not marked as
"rejected" are sent to the carrier.
If no estimate is in XactAnalysis, QA Approve the file on the details tab and this will send the status
report and any other documents in the file to carrier.
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Commercial Property Damage Evaluation
Guidelines
Introduction
The guidelines contained in this document were prepared by the Texas Windstorm Insurance
Association (TWIA) for use by its staff, its contracted independent field adjusting firms and their
adjusters, as well as other business partners involved in the evaluation, handling, and servicing of
TWIA’s claims.
Guidelines described in this document may differ for individual claims depending upon the
unique facts and circumstances of each claim. This document is intended to serve as a guideline
only; the adjuster should apply professional discretion as each claim is unique. These guidelines
were composed to comply with applicable insurance policies, contracts, laws, rules and
regulations of the State of Texas. In the event of any conflict, applicable laws and regulations will
prevail.
If you have any questions or comments regarding the content of these guidelines, please
contact your TWIA Claims Examiner to discuss.
Roles and Responsibilities
Claims Manager
The responsible TWIA manager will review and triage incoming commercial claims prior to the
assignment of the examiner based on the complexity of the claim. They will then oversee the
handling and review the progress of the claim as it is in progress. They serve as an in-house
resource for as well as make other assets available to the examiner as the need arises.
Claims Examiner
When TWIA receives a first notice of loss (FNOL) on a commercial claim, TWIA examiners review
the policy and risk information prior to the assignment of the claim. Examiners will also review
any available information such as aerial photography, prior claims, underwriting files, and
descriptions of damage to make an initial determination of the type and number of experts that
may be needed during the evaluation of the claim.
As additional information is gathered, TWIA examiners and independent field adjusters work
together to determine what additional resources are required in the evaluation of the claim.
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Independent Field Adjusters
It is the role of the independent field adjuster to gather evidence, document the windstorm or
hail damage being claimed, as well as damages observed but not claimed. Independent
adjusters are responsible for coordinating inspections with the Insured’s representatives and the
experts engaged by TWIA. The adjuster will also be responsible for the updating of the
XactAnalysis claim file with status and final reports as well as any reports received from any
experts.
One or more of the following types of independent field adjusters will be assigned to a
commercial claim:
Executive General Adjuster (EGA)
The EGA is the executive adjuster on the claim. The EGA works with the policyholder’s
representative, the insurance agent, experts and other stakeholders to ensure that all concerns
are addressed.
In instances of claims with a large number of items, it is expected the EGA will use a team
approach to evaluating the claim. A team approach is one in which the EGA will identify and
secure a sufficient number of resources to complete a thorough investigation of the insured’s
claim within as few days as possible. The EGA must contact the TWIA Claims Examiner to get
approval for the number of adjusters and resources being utilized to evaluate a claim. It is the
responsibility of the EGA to identify and coordinate adjusters as well as experts utilized on a
claim to inspect, photograph, document, estimate and report on damages.
Example of a team approach model
Claims Examiner
General
Adjuster
Executive General
Adjuster
General
Adjuster
General
Adjuster
Expert
Expert
Expert
Commercial
Adjuster
Commercial
Adjuster
Commercial
Adjuster
Commercial
Adjuster
Commercial
Adjuster
Commercial
Adjuster
Commercial
Adjuster
Commercial
Adjuster
Commercial
Adjuster
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General Adjuster (GA)
General Adjusters are, usually, assigned to handle medium-to-small commercial claims with
medium-to-low anticipated complexity. General Adjusters are also assigned to report to EGAs
on large complex commercial claims with multiple scheduled items and/or locations. General
Adjusters may also coordinate the inspection efforts of CAs at the request of an EGA.
Commercial Adjuster (CA)
Commercial Adjusters are primarily assigned to work at the direction of an EGA or GA to
photograph and inspect properties with a large number of buildings or a large number of
residential units, such as apartment buildings, condominium buildings, and townhouses under
the team approach to ensure claims are resolved within the statutory timeframes of 60 days
under HB 3.
Engineers
Licensed independent engineers are commonly used to address questions about causation of
damages on commercial claims. If an inspection or conversation with the insured reveals the use
of an engineer is warranted, please contact the TWIA examiner to obtain approval.
Building Consultants
On complicated or unusual repairs, a building consultant should be engaged on the claim. The
building consultant will provide an evaluation of damages to the adjuster that may include, but
not limited to, cost of labor and materials, bids, and estimates. It will be the job of the adjuster
to coordinate these resources with any other experts and personnel involved in the claim, such
as coordinating inspection times, sharing of expert reports, etc.
Independent Contractors
It may also be necessary for the adjuster to coordinate with independent contractors to secure
bids to determine the actual cost of repair. In these cases, the adjuster acts in a similar fashion
as they do with Building Consultants, coordinating inspections and documents between the
association and the policyholder.
Authority of the Policyholder’s Representative
Many commercial policies are for organizations that have many partners, managers, employees,
property managers, and/or board members. It is important to make sure we identify the person
with proper authority to make decisions on the behalf of the insured organization.
When you make initial contact with a person claiming to represent the policyholder, you
must specifically identify the person’s name, title, and contact information. Consider
obtaining a business card and include it in your report.
If you are dealing with anyone other than the individual named as the policyholder, ask that
person if they have the authority to make final decisions regarding the claim and be sure to
state his/her response in your report.
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You might find that the policyholder wants you to deal with different individuals for
different properties or different aspects of the claim.
For consistency and whenever possible, attempt to work with a single person with proper
authority over all areas of the claim.
If you must to deal with more than one person in order to provide the best service to our
customer, be sure to gather all the needed information for each of them and relay it to
TWIA in your report.
Secure written documentation confirming who the contact person representing the insured
is.
If the contact person is a Public Adjuster, gather a copy of the applicable license and
contract and forward to TWIA as soon as possible.
If the contact person is an attorney, whether or not they claim to have been hired to
represent the policyholder, contact the assigned TWIA examiner before proceeding.
If you think there might be any question later regarding an individual’s authority to
represent the policyholder, contact the assigned examiner and discuss the situation prior to
proceeding.
Commercial Policies Insured by TWIA
TWIA assigns commercial policies to one of the following categories. There are some aspects of
commercial claim handling which are universal to the types of claims being presented, in
addition to the guidelines previously established in the residential property evaluation
guidelines some additional considerations are:
Confirm the insured’s authorized representative
Confirm the buildings affected by the claim with the insured
Confirm with TWIA the number of resources needed to complete the evaluation of the claim
Photograph all of the insured location, including damaged and undamaged areas
Secure any repair estimates, bids, maintenance logs, repair records, or other pertinent
documentation.
Governmental Entities
The typical types of governmental entities insured by TWIA are county, city, port authority,
housing authority, school district, municipal utility district, or other political subdivision of the
State of Texas. These claims must be handled by an EGA, with a team approach. Guidelines for
evaluating these types of claims are listed below:
Confirm the insured’s authorized representative in writing
The EGA should confirm the buildings affected by the claim with the insured in writing
Confirm with TWIA the number of resources needed to complete the evaluation of the claim
Secure competitive bids from Independent contractors
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Essential Services
Essential Services are items covered by a TWIA policy such as hospitals, police stations, fire
stations, schools, daycares and assisted living facilities. Claims for these types of policies will
receive the highest priority. Every effort should be made to resolve these claims as quickly as
possible. An EGA using a team approach and building consultants must be utilized on these
claims. A report should be submitted for review every ten days until the claim is resolved.
Condominiums, Townhouses, and Apartment Buildings
The exterior and interior of every insured condominium, townhouse, and apartment building
must be inspected for damage. Condominiums, Townhouses and Apartment building claims will
be handled by an EGA, with a team approach.
Claims involving condominium associations, including the sub-group townhouse associations,
are complicated by the existence of two types of property within the association – “common
elements” and “units.” The common elements are further subdivided into “regular common
elements” and “limited common elements.” The ownership, right to use, responsibility to
insure, and responsibility to maintain each of these types changes from type to type. Before
TWIA can determine what portions of the loss might be covered under the association’s policy
and what portions of the loss might be covered under the unit owner’s policy, it must be
determined who insures what. That determination is spelled out in the legal documents that
formed the condominium association. These are often called the “Conditions, Covenants, and
Restrictions (CCRs),” the “By-Laws,” or the “Condo Docs.”
You must request the condominium documents from the policyholder representative during
your initial contact. It usually takes time to assemble and copy the large packet of
documents, get started on the process early.
a. However, since the documentation is the same for all unit owner claims within a
condo association with multiple units, TWIA is developing a repository of the condo
documents for the properties it insures. You should check with the assigned
examiner to see if TWIA already has the needed documents before asking the
insured. Confirm that it is the latest version or that all amendments have been
included.
It is not always clear where in the condo docs the “Insurance” section is found. It is often
confused with the section dealing with “Maintenance,” so it is best to get the whole
document, not just some of the pages.
Although the document needed is often called the “By-laws,” there is a separate document
related to the incorporation of the Association titled “By-Laws.” TWIA does not need the
corporate By-Laws.
The “By-Laws” are a large formal document officially recorded with the State and they are
usually dozens of pages in length. If the association representative provides you with a
document that is only a few pages long, it is unlikely to be the correct and necessary
document.
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The documents written during the formation of the association are sometimes changed or
amended in following years. Be sure to ask for the original document and any amendments.
If you are handling the HOA’s claim, you might get calls from the TWIA adjusters handling
the unit owner claims asking if you have already obtained the necessary documents. If you
have already obtained the condominium documents and forwarded them to TWIA, it is not
necessary for the other adjusters to obtain a copy.
Endorsement 282 (including both the 282-1 and 282-2 versions) makes all elements of the
property insured under the association’s master policy. TWIA does not need to separate
common and limited common elements from the unit elements so there is no need to
review the condo docs.
If the HOA policy includes a 282 endorsement, you do not have to gather the condo docs.
Churches and Historical Buildings
EGAs are, usually, assigned to churches and historical buildings due to the complexity of the
inspections for damages to buildings (and other scheduled structures), business personal
property, and business income loss. An EGA may engage the team approach to address
causation, building codes, inventory valuation, salvage, etc.
Large Commercial
Manufacturing centers, large warehouses, shopping centers and office buildings make up most
of TWIA’s large commercial claims. A GA or an EGA may be assigned to a Large Commercial
claim based on the size, complexity, and type of damage being claimed.
Small Commercial
TWIA’s small commercial claims, usually, consist of damage to small-to-medium buildings and
claims on policies with business personal property only. Most small commercial claims are
assigned to GAs. Depending on the loss, Xactimate estimates may be acceptable on these
claims.
Investigation and Reporting
HB-3 timelines for resolution are the same between the commercial and residential policies. As
a result, many of the same guidelines found in the residential section are applicable to
commercial claims. These include:
Contact within 24 hours of assignment
First visit/inspection to the loss location within 48 hours of assignment
Initial/Preliminary inspection report within 72 hours of initial visit/inspection
Status updates on a weekly basis
Due to the complexity and nature of many commercial claims and properties, there are
additional considerations with respect on how to approach and conduct the investigation.
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Reserve Recommendations
The initial/preliminary inspection should provide a measurable outline of all damages, which
should allow the claims adjuster to project a reserve for the claim within 3-6 days of assignment.
Losses up to $25,000 can be reported on the “Initial Inspection Report” or “Loss Report.”
Losses over $25,000 should be reported on the full “Narrative Report,” still within three
days of the initial/preliminary inspection.
Loss reserves should capture a dollar reserve for the following categories and be rounded to the
nearest one hundred dollars.
The following examples illustrate how loss and expense reserves are calculated and documented
when projecting reserves.
Loss Reserves/Claim Indemnity
Building – Item #4 $10,000.00
Business Personal Property– Item #5 $1,000.00
Business Income Loss $0.00
Extra Expenses $0.00
Total Loss Reserves $11,000.00
Claim Expenses
Independent Adjuster $800.00
O & C Investigation/Engineer $2,500.00
Building Consultants $1,500.00
Total Expense Reserves $4,800.00
A general disclaimer on establishing a recommended reserve should be posted with the “Initial
Inspection Report” or “Narrative Report.” What follows is an example of this general disclaimer.
Important Disclaimer
The sole purpose of this report is intended only to assist the insurance carrier with establishing
reserve(s) recommendations. The dollar amounts referenced within this report are not intended
to establish settlement value, but merely to reflect the possible exposure based on our initial
inspection of the property in question. Once our formal inspection and valuation of the loss has
been completed, the referenced reserve recommendations may need to be adjusted. These
reserve recommendations, and any future adjustments, do not take into consideration
coverage(s), coverage limitations, or any other coverage analysis, nor should the mere
recommendation of these reserves be construed as an acceptance of coverage or an indication
that a payment for that amount would be appropriate or is being recommended.
Coinsurance
Condition 7 of the TWIA policy addresses the subject of coinsurance.
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“If a coinsurance percentage is shown in the Declarations, the following condition applies: We
will not pay the full amount of any loss if the actual cash value of covered property at the time
of loss times the coinsurance percentage shown for it in the Declarations is greater than the
limit of liability for the property.”
Coinsurance should be addressed at the time of the initial inspection by conducting a detailed,
accurate Insurance-to-Value Report (ITV) using a valid assessment methodology including, but
not limited to, reconstruction estimate, ITV programs or appraisal documents. A coinsurance
penalty may affect the case reserves established for the loss.
The coinsurance percentage is shown on the First Notice of Loss (FNOL) provided to the
adjuster. In many instances, this coinsurance percentage is 80% of the ACV; however,
this percentage is variable.
The MSB ITV report should be completed and uploaded with the initial report.
An accurate replacement cost value with properly applied depreciation should derive an
actual cash value of the property in question.
The TWIA policy details steps used to calculate the coinsurance provision, along with
examples.
If you believe the coinsurance provision need to be applied, notify the Claims Examiner as soon
as possible. Do not apply the coinsurance provision to an estimate without first contacting the
Claims Examiner. Claims management will make the final determination as to whether the
Coinsurance provision is applied to the loss settlement.
Core Samples
Core samples may be required on low slope roofing to determine the multiple roof membranes,
possible recovery boards, insulation and fastening method of the roof system. The field adjuster
should not take core samples on low slope roofing.
The location of a core sample should be determined by an engineer or roofing consultant. In
most cases, one core sample will be taken at the low point and another will be taken at the high
point of a ridge or cricket. The appropriate expert can determine the type of roof system with
the core sample and coordinate with a roofing consultant on replacement or reparability.
In a case of possible subrogation or storage of the sample core, the engineer must keep control
of and invoice for the storing and security of the core sample. Prior to coring a roof, consider the
effects of destructive testing to any roof system or manufacturer warranties and alert any other
interested parties.
Document questioning of the insured to determine the manufacturer and warranty in
the “General Loss Report.”
If a warranty is in place, a “Certified Roofing Contractor” should be contacted to
complete the sample core and complete repairs after the core is taken
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The engineer and building consultant can assist in the location of the core sample and
how many core samples are required
The General Adjuster should contact TWIA prior to any roof cores taking place
The General Adjuster should secure a quote on the cost of taking and repairing the core
sample area
Roof-Top Mounted Equipment
When inspecting the risk location, it is important to look at heating, ventilation, air conditioning, and
refrigeration equipment, including ductwork, A/C mounting curbs, skids, uni-struts, and strapping details
securing equipment to the roof. (See ASRAE Journal, volume 48, #3, March 2006). The independent
adjuster should photo document these components.
When inspecting a risk with multiple mechanical units located on a roof-top, a mechanical building
consultant may be required to scope, document, and estimate the cost of repair. Contact your Claims
Examiner for further direction.
Aerial Images
Location specific aerial images, both, pre and post event, should be reviewed as part of the
evaluation process.
EagleView Roof Reports are automatically requested and available for policies with single
location. When a policy includes multiple locations and/or multiple buildings per location,
individual reports must be requested from and coordinated with EagleView.
1. Email a request to EagleView (customerservice@eagleview.com) requesting roof reports for
each building at a specific location.
2. An EagleView Customer Service Representative will send an overview of the buildings at
the requested address, labeling them as Buildings 1, 2, 3, etc.
3. Respond to the Customer Service Representative by indicating which of TWIA’s
scheduled items correspond to each of their numbered buildings. For example, Building
1 is TWIA Item 001, Building 2 is TWIA Item 003, Building 3 is not insured by TWIA, etc.
4. EagleView will then generate the requested roof reports labeling with the TWIA Item
numbers indicated.
Claims with a Large Number of Insured Items
Some of TWIA’s Commercial Policies include dozens or hundreds of Insured Items and locations.
Following are recommendations for working with these types of claims:
Narrowing the Scope of Inspection
Because commercial policies often insure multiple structures, it is imperative to
acknowledge and address the possibility of damage to all of those insured items. Your
report package must discuss each location, each building, each room, and any BPP in
those rooms. If the insured identifies buildings or structures for which no claim is being
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made and provides a written statement stating the same, those buildings or structures
and the contents within them do not need to be inspected.
To insure that everyone is clear which buildings or contents are not being
claimed, the insured must give you a written statement declining your offer to
inspect them.
The signed statement must be from a person properly authorized to make such
a decision on behalf of the insured.
A copy of the original signed statement must be included in your report.
Confirm Coverage Afforded Under the Policy
Since TWIA policies renew yearly, the insured’s can add and remove items from coverage on
a regular basis. Confirm with the insured that the item listed is the item being presented for
claims. If need be, confirm with TWIA Underwriting or the insured’s agent which items were
included or excluded from the policy.
Use Team Approach
An EGA will employ a team of adjuster, general adjusters, engineers and estimating experts
to evaluate claims with 5 or more items/areas of inspection. The EGA will be the point of
contact for both TWIA and the insured, and will coordinate all inspections, appointments,
and request for information.
Uploading Large Reports
All estimates and reports should be uploaded in PDF form to XactAnalysis, through which they
will be submitted to TWIA. If you have any questions, please contact the claims examiner
assigned to the claim.
Claims with dozens or hundreds of Insured Items can get too numerous and/or voluminous to
upload through XactAnalysis. Work with the TWIA Claims Examiner to create a plan for
submission of items required to document the claim. Suggestions include breaking items into
smaller batches (Items 1-10, Items 11-20, etc.), or using an FTP or Cloud site to upload the
required information. Consider uploading both live and PDF copies of spreadsheets, so that the
examiner can edit the live spreadsheet to process RCC claims and perform other tasks at a later
date.
Emergency Services
If it is determined that emergency services, such as water mitigation, board-up, tarping, or
generators, are advisable, immediately consult with the claim examiner to coordinate these
resources. It’s important for the insured to understand that such services do not increase the
limit of liability.
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Evaluating the Loss
The adjuster should consider all available options for completing an estimate in accordance with
best practices. In most cases, an Xactimate estimate is not the preferred estimating tool. The
adjuster should consider the size of loss, complexity, time needed and resources available to
complete an estimate. There are several types of acceptable estimates for commercial claims,
these are:
Xactimate estimates
o Should be used on small to medium complexity claims
o Primarily on residential components
o Should not be considered as the first available option on claims with anticipated
losses exceeding $100,000
o Xactimate estimates of repair should conform to Xactimate best practices. Pay
careful attention to what is included in each line item cost. For instance, the line
items for removal of exterior siding, usually, do not include the disposal cost of that
debris; however, the line item for the removal of asphalt shingles does include
disposal cost.
o Xactimate pricing is an estimate and guideline. Situations may arise where the
pricing is not in line with the actual expected cost. Work with the claims examiner
and the insured should changes to the Xactimate price list become necessary.
Building Consultant estimates
o Should be used on medium to complex losses
o Can be used as part of the competitive bid process
o The building consultant should be the expert in determining the appropriate form of
estimation used for the type of claim presented
Time and Materials
o To be used on complex losses
o Should be completed by a building consultant or independent contractor
Competitive Bids
o Should be used on complex losses and losses involving more than 1 location
o Can use the insured contractors or independent contractors identified by the EGA,
TWIA or building consultant
o Efforts should be made to ensure the receipt of competitive bids prior to the 60 day
HB 3 timeframe
Other loss evaluation guidelines:
o Split items within the estimate by applying the proper line of coverage (with appropriate
limits and deductibles) to line items to which they apply.
o Properly label the items within the estimate. For example, it would be more accurate
and descriptive to label the item as “Item 1 – Fire Station #3,” instead of ”Commercial.”
o The estimate should follow a similar structure as the photo report and general loss
report. Begin with overview photos followed by roof photos, exterior photos, interior
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photos, and contents photos. Following this same pattern in the loss report and the
estimate will make the file easier to review and understand.
o Interior sketches should line up with exterior sketches with correlated areas of damage
clearly outlined.
o The inspection cost for securing a WPI-8 wind certificate by statute cannot be paid for
by TWIA. This cost is the responsibility of the insured. However, if the windstorm
engineer is required to design a plan for meeting wind code or I.B.C. – 2006 code
requirements, the plan cost may be covered on an incurred basis only. Contact your
Claims Examiner for further direction.
o If the adjuster identifies risk factors such as, but not limited to, building code violations,
safety issues, or other underwriting concerns, they should prepare an underwriting risk
report to alert TWIA to these potential problems.
Consult with the Claims Examiner, who may find it necessary to instruct the adjuster to work
with other experts and partners on the claim to deliver the best estimate for the repairs of the
covered damages.
Material and Labor Sales Tax on Repair Estimates
The TWIA guidelines on including sales tax on repair cost estimates comes from the Real
Property Repair and Remodeling tax publication from the Texas Comptroller of Public Accounts,
which can be found on the Comptroller’s web site at
http://www.window.state.tx.us/taxinfo/taxpubs/tx94_116.html. The topics that are most
applicable to TWIA’s Commercial policyholders are:
Residential vs. Nonresidential Repair and Remodeling
Tax exempt Organizations
Natural Disasters
Residential vs Nonresidential Repair and Remodeling
“Labor to repair, remodel, or restore residential real property is not taxable.
Residential real property means family dwellings, including apartment
complexes, nursing homes, condominiums, and retirement homes. It does not
include hotels or residential properties rented for periods of less than 30 days.
The property does not have to be the residence of the owner.
On the other hand, the total amount charged for remodeling, repairing, or
restoring nonresidential real property is taxable. Examples of nonresidential real
property are hospitals, office buildings, refineries, warehouses, parking garages,
retail shops, restaurants, manufacturing facilities, and other commercial
establishments.”
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Tax-exempt Organizations
“You don't need to charge tax when you do a job for a governmental agency -
federal, State of Texas, or Texas local government. Some nonprofit
organizations also are exempt from tax but must give you an exemption
certificate. Other nonprofit organizations must pay sales tax. If an organization
has a letter from the Comptroller of Public Accounts exempting it from sales tax,
and the real property improvement relates to the exempt purpose of the
organization, certain exemptions are available.”
Governmental Entities
Section 151.309 of the Texas Tax Code defines the governmental entities that are
exempt from sales tax. The definition that most specifically applies to TWIA Insureds is
“(5) a county, city, special district, or other political subdivisions of this state.” TWIA
Policyholders that are political subdivisions of the State of Texas are counties, cities,
school districts, housing authorities, port authorities, municipal utility districts, etc.
Non-profit Organizations
As mentioned above, a non-profit organization must have an exemption certificate from
the Comptroller’s office to be exempt from sales tax. Independent adjusters should
obtain a copy of the certificate from the insured organization. A copy of the certificate
can also be obtained through the Texas Tax-Exempt Entity Search:
http://window.state.tx.us/taxinfo/exempt/exempt_search.html.
Natural Disasters
“The labor to repair nonresidential property damaged in an area declared a
natural disaster by the President of the United States or the Governor of Texas
is not taxable. (Materials are still taxable.) The property must have been
damaged by the condition that caused the area to be declared a natural
disaster. The contract or billing must separately state the amount charged for
labor from the amount charged for the incorporated materials.”
Sale Tax Rate
In Texas, the sales tax rate is a maximum of 8.25%. It is based on the state sales tax of
6.25% and up to 2% of taxes from counties, cities, special purpose districts and transit
authorities. To determine the rate of tax that should be applied to a property at a given
address, use the Comptroller’s Tax Rate Locator at
https://mycpa.cpa.state.tx.us/atj/addresslookup.jsp. It is important to note that a
policyholder may have different tax rate for different insured properties, depending on
the rates at the individual addresses.
Commercial HB-3 Policy
TWIA policies are named-peril coverage for windstorm and hail only, with exclusions.
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There are significant differences between the TWIA Dwelling and Commercial policies and
significant differences between standard ISO® commercial policies and the TWIA Commercial
policy. It is required any Commercial Adjusters know the TWIA Commercial policy and
endorsements, to have access to them in the field, and to refer to them often. Copies of the
Commercial Policy and Endorsements can be found at http://www.twia.org.
See below for a summary of highlights from the TWIA Commercial policy
Coverage A
TWIA policies cover the perils of windstorm and hail only. Some residential policies have
coverage for indirect loss by endorsement (i.e. Consequential Loss, ALE and Wind-Driven
Rain). However, commercial policies do not have this optional endorsement.
The TWIA Commercial policy covers buildings or structures, meaning everything which is
legally part of the buildings or structures described in the Declarations. However, the TWIA
Commercial policy does not cover machinery which is not used solely in the service of the
building.
The TWIA Commercial policy also covers, under Coverage A, personal property that is
owned by the insured, used for the service of, and located on the described location. The
personal property items listed below are NOT covered if the insured is only a tenant or
occupant of the building.
o Fire extinguishing equipment;
o Maintenance equipment and supplies;
o Floor coverings;
o Window shades;
o Furnishings of corridors and stairs; and
o Appliances used for refrigerating, ventilating, cooking, dishwashing or laundry.
The TWIA commercial policy covers materials and supplies located on or next to the
described location used to construct, alter or repair the covered building or other structures
on the described location, up to a limit of 10% of liability on coverage A. This is not
additional insurance and does not increase the Coverage A (Building) limit of liability.
At the insured’s option, 10% of the limit of liability applying to boarding, rooming, fraternity
or sorority houses or apartment buildings (containing 8 or less separate apartments) may be
extended as excess insurance to the items listed below. This extension does not apply to
structures over or partially over water, is not additional insurance, and does not increase
the limit of liability.
o Fences
o Drives
o Walks
o Outdoor Fixtures
o Garages, Employee’s Quarters and other outbuildings used in connection with any
such building.
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When replacement cost applies to the building, these items are ALL estimated at
replacement cost, except for carpeting, cloth awnings, window or wall air conditioning units,
which are always ACV under a Commercial Policy. Non-recoverable depreciation should be
applied on material only.
Coverage B
The TWIA policy covers business personal property located in or on the building, or in the
open on the location, or in a vehicle or railroad car located within 100 feet of the described
building, consisting of the following (unless otherwise specified in the Declarations):
Furniture and fixtures;
Machinery and Equipment;
Stock, meaning merchandise held in storage or for sale, raw materials, and goods in
process or finished, including supplies used in their packing or shipping;
All other personal property owned by the insured;
Personal property of others for which the insured is legally liable;
Personal property of an insured’s officers, partners or employees, if not otherwise
insured. (Loss or damage to the covered property will be adjusted and made payable to
the insured.)
Labor, materials or services furnished or arranged by the insured on personal property
of others;
The insured’s interest as tenant in improvements and betterments.
The insured’s interest as unit owner in improvements and betterments made to a
condominium. However, TWIA’s commercial policy does not cover property in or on the
described location which is defined in the condominium’s declarations or by-laws as a
common element.
Property not covered
Whereas the TWIA Dwelling Policy addresses Property Not Covered under one heading of, “We
do not cover,” the TWIA Commercial Policy has two designations -- 1) Unless specifically
described in the Declarations, we do not cover, and 2) We do not cover. The following chart
highlights the distinctions between the two policies. Note that under the Commercial policy
items fall under one of the two categories.
Residential
Commercial
1. Animals
1a. Same
2. Money, currency or bullion.
3. Securities, deeds or evidences of debt.
4. Records, books of records or manuscripts.
1j. Manuscripts, bullion, records and books of records (except for
their physical value in blank);
2a. Accounts, currency, deeds, or other evidences of debt, money or
securities.
5. Motor or engine propelled vehicles or machines designed for
movement on land, including attached machinery or equipment.
However, we do cover such vehicles, while located in a fully
enclosed building, which are not subject to motor vehicle
registration and are:
a. Devices and equipment for assisting the handicapped.
b. Power mowers and other lawn and garden equipment not
1b. Same with addition of 1b(5) Forklifts
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Residential
Commercial
exceeding 18 horsepower.
c. Golf carts.
d. Vehicles or machines used for recreational purposes while
located on the described location.
6. Aircraft, meaning any device used or designed for flight except
model or hobby aircraft not used or designed to carry people or
cargo.
1c. Same
7. Watercraft, including outboard motors and furnishings or
equipment. However, we do cover watercraft, including outboard
motors and furnishings or equipment while located on land in a fully
enclosed building on the described location.
1d. Same
8. Unless described in the Declarations:
a. Cloth awnings
b. Greenhouses and their contents
1h. Greenhouses and cloth awnings
8. Unless described in the Declarations:
c. Metal screen enclosures and their contents.
1i. Same
8. Unless described in the Declarations:
d. Buildings or structures located wholly or partially over water and
their contents.
1e. Wharves, docks, piers, boathouses, bulkheads or other structures
located over or partially over water and the property in or on it.
8. Unless described in the Declarations:
e. Radio or television towers.
f. Outside satellite dishes, masts and antennas, including lead-in
wiring.
g. Windmills and wind chargers.
1f. Radio or television towers, antennas and satellite signal receiving
equipment, windmills, wind chargers, and outside erected signs.
9. Wind turbines.
2b. Same
10. Breakaway walls, or personal property contained within a
breakaway wall enclosure. Breakaway wall means a wall that is not
a part of the structural support of the building and is intended
through its design and construction to collapse under specific lateral
loading forces, without causing damage to the elevated portion of
the building or supporting foundation systems.
2c. Same with addition of business personal property.
11. Property that is covered under another coverage form of this or
any other policy in which it is more specifically described, except for
the excess of the amount due from the other insurance.
2d. Same
NOT IN DWELLING POLICY
1g. Metal smokestacks, except when securely fastened to walls of a
masonry building.
NOT IN DWELLING POLICY
1k. Customers goods in laundries, cleaning, or pressing
establishments.
It is also important to note; signs attached to the outside of the building are covered. Free-
standing signs must be scheduled for coverage. Always check the Assignment sheet to verify
whether an item is specifically scheduled.
Common Endorsements
Below is a brief description of some of the most common TWIA Commercial Endorsements. This
overview is not a detailed analysis of the endorsements. Independent adjusters are required to
understand the Commercial Policy and Endorsements. Please contact the TWIA Claims
Examiner with any questions you may have.
Endorsement 164 – Replacement Cost Endorsement
Endorsement 164 applies replacement cost coverage to the items specified.
Regardless of this endorsement, there is no replacement cost coverage for:
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a. Stock, (raw, in process or finished) or merchandise, including materials and supplies in
connection therewith;
b. Property of others;
c. Personal property usual to a residence;
d. Books of account, manuscripts, drawings, card index systems and other records
(including film, tape, disc, drum, cell and other magnetic recording or storage media);
e. Paintings, etchings, pictures, tapestries, statuary, marbles, bronzes, antique furniture,
rare books, antique silver, porcelains, rare glassware and bric-a-brac or other articles of
art, rarity or antiquity;
f. Outdoor equipment, except equipment used in the service of the building; or
g. Carpeting, cloth awnings, window or wall air conditioning units.
However, if TWIA insures a church, school or hospital under this policy, replacement cost will
apply to the items a-f listed above.
Policyholders have 545 days from the date of claim settlement to recover any applicable
depreciation.
If there are questions or concerns regarding what items may or may not be applicable, contact
the assigned claims examiner.
Endorsement 282 (1) or (2) – Condominium Property Form
The 282 endorsement is for the condo association only.
The endorsement amends the covered property to include fixtures, installations or additions of
the building within the unfinished interior of the individual condominium units initially installed.
The endorsement may also include coverage for those items installed by or at the expense of
the unit owner.
Endorsement 17 – Business Income Form
Provides a “daily limit” or “pro rata amount” if the insured sustains a covered loss causing loss of
“business income” and/or “rental value.” This coverage is applicable during the period of
restoration. The endorsement also provides coverage for “extra expense” that an insured incurs
during the period of restoration that they would not have incurred had there been no direct
physical loss or damage to the property.
The Maximum Limit of Liability is $100,000 per building per occurrence.
Daily Limit per Working Day per Building is $50.00 per day minimum and $1,000.00 per day
maximum.
Number of Working Days Covered is 60 days minimum and 365 days maximum.
The Daily Limit and Number of Working Days Covered will have been determined by the insured
and their agent and submitted to TWIA with application for approval. The available coverage will
be reflected on the declarations page.
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The maximum amount that will be paid for “extra expense” coverage is $10,000 occurring within
365 consecutive days after the date of direct physical loss due.
Endorsement 17 waiting period
Endorsement 17 covers the loss of business income differently than the way it is
covered under the more usual ISO-type policies written by other carriers, such as the
“CP,” “BP,” or “BO” series of forms. One of the differences is the way that the
“deductible” is handled.
Rather than apply a dollar amount as a deductible, Endorsement 17 states the
coverage does not start until 168 hours after the loss.
This week-long waiting period starts at the moment physical damage occurs
that creates the loss of business income.
If a second covered loss occurs before the business is repaired, a waiting period
is not applied to the second loss.
To account for the waiting period, your report can simply calculate the business
income loss from the date seven days after the loss until the date the building
was repaired to the point it could resume normal operations. There is no need
to calculate the entire business interruption from the date of loss and then
subtract the value of the first seven days.
Endorsement 432 – Increased Cost of Construction
Endorsement 432 provides coverage for the increased costs that are incurred by an insured due
to the enforcement of any ordinance or law. This endorsement is applicable to claims where a
code upgrade is necessary to complete a covered repair. This is paid as incurred and it should be
noted on the estimate as such.
The total limit of liability for each building item designated is shown on the actual endorsement.
This is additional insurance and does not reduce the limit of liability on the policy. Some of the
most common increased cost of construction items seen at TWIA are as follows:
Use of Composition Shingle Roofing on Low-Sloped Roofs
Composition shingle roofing may be used on slopes that are 2/12 and above.
However, if the slope is from 2/12 up to 4/12, a double layer of felt paper must
first be installed. Slopes of less than 2/12 pitch require a modified bitumen or
another approved material.
Roof-Top Mounted Equipment
Roof-mounted equipment may require a wind engineer to inspect and design
site-specific requirements for mounting the equipment to the roof. Based on
the property location within one of the fourteen counties and the three wind
zones along the Texas coast line, a design plan may be required by a certified
wind engineer design with a proper fastening method (ASCE7-2005) of tying
equipment to the roof-top.
TWIA & TFPA Property Damage Evaluation Guidelines
2014
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Endorsement 26 – Church Form
Endorsement 26 provides coverage for a church building and business personal property (BPP)
as one line of coverage, with one deductible. When gathering information to generate an ITV
report on the building, be sure to gather information on the BPP, as well, to be able to perform
insured-to-value calculations.
Endorsement 176 – School Form
The School Form, much like the Church Form, combines building and business personal property
into one line of coverage with one deductible. The School Form excludes coverage for books
that are owned by the state, unless those books are specifically insured by this policy for a
separate amount.
Endorsement 18 -- Builder’s Risk Stated Value Form
Endorsement 18 covers the building stated in the declarations page while it is in the course of
construction up to the stated limit. It also covers property intended to become a permanent
part of the building if located in the building or within 100 feet of the building premises.
Also covered under this endorsement are materials, equipment, supplies and temporary
structures to be used in the construction of the building.
Endorsement 21 -- Builder’s Risk Actual Completed Value Form
Similar to Endorsement 18, Endorsement 21 covers the building stated in the declarations page
while it is in the course of construction. However, the coverage liability will not exceed the
actual value placed of the building or structure. The amount of insurance applicable to the
building, while in the course of construction, will change from time to time as the value put into
the structure changes.
As in Endorsement 18, it also covers property intended to become a permanent part of the
building if located in the building or within 100 feet of the building premises as well as materials,
equipment, supplies and temporary structures to be used in the construction of the building.
