For property and casualty (P&C) insurers operating in catastrophe-prone regions like Texas, wind policies play a crucial role in protecting both policyholders and the insurer’s bottom line.
Windstorms, especially hurricanes and severe thunderstorms, pose significant underwriting challenges due to the unpredictable nature and high cost of associated damages. To stay competitive and compliant, insurers must implement flexible, accurate, and scalable solutions within their insurance software systems.
Wind Coverage vs Homeowners Insurance
Wind coverage typically falls under a homeowners insurance policy as part of the dwelling protection component. However, in high-risk areas like coastal Texas, insurers must often treat wind damage separately through endorsements, separate deductibles, or standalone windstorm policies.
The Texas Windstorm Insurance Association (TWIA), for example, provides windstorm coverage for properties in eligible coastal counties when private insurers exclude wind from standard policies. This landscape demands insurance products that are highly customizable to comply with regional standards and remain viable for both the insurer and the insured.
The Role of P&C Insurance Software
Insurance software platforms, like WaterStreet Company, are the backbone of modern underwriting and policy configuration. When it comes to wind policies, especially in catastrophe-exposed regions, insurers must account for a wide array of variables.
- Property location and proximity to coastlines
- Roof construction and shape
- Building materials
- Presence of storm shutters or reinforced windows
- Compliance with local building codes
- Historical loss data
Challenges
Configuring all of these variables manually or through static rating tables introduces the risk of inefficiency, error, and regulatory non-compliance.
Opportunities
A flexible software solution like the WaterStreet Policy Administration System allows insurers to configure these variables dynamically, using rule-based engines that update automatically when state or regional guidelines change.
Wind Mitigation Techniques
Wind mitigation means reducing the likelihood or severity of windstorm damage. Wind mitigation is not only an important consideration for homeowners and home builders, but can also be encouraged by insurance companies to help reduce the cost of windstorm damage.
Common mitigation measures across Texas and similar states prone to windstorms include:
- Roof tie-downs and bracings, known as hurricane straps
- Wind-resistant doors and windows
- Reinforced walls
- Improved ventilation to reduce pressure buildup
- Elevated foundations in flood-prone areas
Insurance regulators in many states encourage wind mitigation through credits or premium discounts, and insurers need the ability to recognize and reward these features during policy quoting and underwriting.
With configurable rating engines like those found in WaterStreet’s software, insurers can automatically apply wind mitigation credits based on property inspections or disclosures. These credits can be built into underwriting workflows, ensuring consistency and compliance without manual overrides.
Cross-State Complexity and Standards
One of the most significant challenges in configuring wind policies is the lack of uniformity across state lines.
While Texas has its own set of windstorm guidelines, particularly around TWIA eligibility and coastal wind coverage, other states have different requirements. For insurers operating in multiple states, software systems must be capable of:
- Adapting rating algorithms to meet state-specific standards
- Integrating external data sources (like building code compliance or roof type verification)
- Managing varying deductible options (percentage-based vs. flat-rate deductibles)
- Handling unique reinsurance or catastrophe modeling input
WaterStreet’s platform is built to handle these state-by-state distinctions with multi-state product support. Insurers can configure one product and customize it per state, minimizing duplication and improving speed to market for complex wind products.
Policy Configuration Considerations
When building or refining a homeowners policy to include windstorm protection, insurers should take a modular approach. Key configuration components include:
Wind Deductibles: In Texas, percentage-based deductibles are common. Software should allow these deductibles to vary by region, policy type, or structure age.
Exclusions and Endorsements: Insurers may need to exclude wind from a base policy and offer a buy-back endorsement or standalone wind policy. Software must support modular policy construction to accommodate these options.
Underwriting Rules: Use automation to enforce underwriting rules for eligibility, especially in areas such as Texas first-tier counties. This includes integration with external databases like ISO or TWIA eligibility lookup tools.
Inspection Integration: Enable integration with inspection vendors to validate wind mitigation features and automatically trigger re-rating or underwriting decision changes following windstorm inspections.
WaterStreet Company’s Insurance Platform for Windstorm Policies
WaterStreet’s P&C insurance software offers an end-to-end solution tailored for insurers who need to manage catastrophe risks effectively. Key benefits for configuring wind policies in Texas include:
Highly Configurable Product Engine
Quickly build and adjust wind-specific policies, deductibles, and mitigation credits without hardcoding.
Geospatial Risk Mapping
Determine coastal risk exposure using Geographic Information System tools, helping underwriters assess wind risk accurately.
Built-in Rating and Underwriting
Ensure real-time application of wind mitigation discounts and eligibility rules.
Multi-State Support
Simplify compliance and configuration across high-catastrophe states, from Florida and Texas to the Carolinas.
Here at WaterStreet Company, we support P&C insurance carriers with next-generation, cloud-based insurance software. From Policy Administration and Underwriting to Claims and Accounting, we provide all elements of technology for your company to thrive.
Contact us today to request a consultation and demo.
