Insurer XYZ, an admitted Texas P&C carrier, is declared insolvent. A policyholder has a covered property loss claim pending. TPCIGA steps in. Which statement about TPCIGA's coverage under TIC §462.252 is MOST accurate?

Question

EstatePass Inc. · Accepted Answer

TPCIGA coverage is direct and nonduplicating — it pays covered claims of insolvent admitted insurers, but its obligation is reduced by any other valid and collectible insurance — TIC §462.252 establishes that TPCIGA's obligation to pay covered claims is both direct (TPCIGA pays the claimant or policyholder without routing through the insolvent insurer's estate) and nonduplicating (the covered claim is reduced by the full applicable limits of any other policy covering the same loss, which the claimant must exhaust first under §462.251). TPCIGA covers P&C lines — not life/health, which are handled by the Texas Life and Health Insurance Guaranty Association (Chapter 463). There is no requirement to exhaust personal assets. The association's liability on a claim is capped at the lesser of $300,000 or the policy limit (§§462.213, 462.252(c)).

Insurer XYZ, an admitted Texas P&C carrier, is declared insolvent. A policyholder has a covered property loss claim pending. TPCIGA steps in. Which statement about TPCIGA's coverage under TIC §462.252 is MOST accurate?

Why this is the answer