Key points
- Most non-renewals on $5M–$20M Houston buildings happen because the carrier holds too much wind exposure in the area, even when the building has clean loss runs.
- Large properties are usually insured with a primary property policy plus a separate wind or named-storm layer, sometimes shared between two or more carriers.
- A 2% named-storm deductible on a $12 million shopping center means the first $240,000 of a hurricane claim is the owner’s.
- TWIA only writes the 14 first-tier coastal counties and the part of Harris County east of Highway 146, and its commercial limit is $4,424,000 per building and contents.
- Flood is always a separate policy, and a new NFIP policy generally takes 30 days to start.
Houston commercial property is hard to insure because of wind. A carrier can only hold so many buildings in one hurricane path, and once it reaches that limit it starts sending non-renewals on good properties with clean loss runs. For a gas station, shopping center or strip retail building worth $5 million to $20 million, the fix is usually a program built from several pieces rather than one policy from one company.
This guide explains why that happens, how the pieces fit together, what the deductibles mean in dollars, and what you can do before your next renewal to get better terms.
Why carriers non-renew good Houston buildings
Most owners who call us after a non-renewal have done nothing wrong. The roof is sound, the tenants pay, and there hasn’t been a claim in years. The letter still came. Three things are usually behind it.
Too many buildings in one storm path
Underwriters call this aggregation. Every carrier tracks how much insured value it holds in a given area and models what a single hurricane would cost across all of it. Houston has seen enough in recent years to keep those models busy: Harvey in 2017, the May 2024 derecho that blew out windows downtown, and Hurricane Beryl seven weeks later, which left about 2.2 million CenterPoint customers without power. When a carrier decides it holds too much value between Galveston Bay and Katy, it trims. The trimming usually starts with the biggest buildings, because one $15 million shopping center uses up as much of the carrier’s storm budget as dozens of houses.
The carrier’s own insurance costs more
Insurance companies buy insurance too. It’s called reinsurance, and it’s what pays the carrier’s share of a large hurricane loss. When reinsurance gets more expensive or harder to buy, a carrier writing Gulf Coast property has two choices: raise rates or hold less wind exposure. Many do both. Your building’s premium and your building’s renewal both depend on a contract you’ll never see.
Roof age
The roof is the first thing wind damages and the first thing an underwriter asks about. Many carriers won’t renew, or will only pay a depreciated value on the roof, once it passes a certain age. That cutoff varies by carrier and by roof type, which is one reason a building one company declines can still be placed with another.
How a Houston commercial property wind insurance program is built
A $10 million shopping center rarely sits on one policy anymore. A typical program looks like this.
The primary property policy, from one carrier, covers the building, contents and business income for fire, theft, vandalism and most other causes of loss. On many Houston accounts this policy excludes named storms, or all wind and hail.
A separate wind or named-storm policy from a second carrier, often a specialist, picks up the wind that the primary policy leaves out. This policy carries its own deductible, usually a percentage of value.
When no single carrier will take the full value, the limit is split. In a shared placement, two carriers each take a percentage of every loss, for example 50% each. In a layered placement, one carrier pays the first $5 million and a second carrier pays above that, up to the building’s full value.
| Structure | How the $10M is split | When it’s used |
|---|---|---|
| Single carrier | One policy covers all $10M | Carrier has room in its storm budget for the full value |
| Shared | Carrier A 50%, Carrier B 50% of every loss | Neither carrier will take all of it alone |
| Layered | Carrier A first $5M, Carrier B the next $5M | Specialists that only write the upper layer |
The pieces have to line up. The same building values, the same effective dates and matching exclusions keep a hurricane claim from falling into a gap between two policies. Lining them up is most of the work on these accounts, and it’s covered in more detail on our commercial property insurance page.
Where surplus lines carriers come in
Many wind layers are written by surplus lines carriers, also called excess and surplus (E&S) lines. These are companies that aren’t licensed in Texas but are eligible to write here because they’re licensed in their home state or country. They exist for risks the standard market won’t take, and in Houston that often means wind on high-value property.
Texas has rules for these placements. Before a surplus lines policy is sold, the agent has to make a diligent effort to find a Texas-licensed carrier for the full amount of coverage. The policy must be placed through an agent who holds a Texas surplus lines license, and the carrier has to be eligible with the Texas Department of Insurance, which it applies for through the Surplus Lines Stamping Office of Texas.
One difference matters to owners. Surplus lines carriers aren’t members of the Texas Property and Casualty Insurance Guaranty Association, which protects policyholders when a licensed carrier fails. Every Texas surplus lines policy carries a printed notice saying so. That makes the carrier’s financial strength worth checking before you sign, and TDI’s Help Line at 800-252-3439 will confirm whether a company can legally sell insurance in Texas.
How percentage wind deductibles work
Most wind and named-storm deductibles on Houston commercial property are set as a percentage of the insured value. Percentages from 1% to 5% are common. The question that changes the math is what the percentage is applied to.
Take a $12 million strip center made up of three buildings, each insured for $4 million, with a 2% named-storm deductible. A hurricane damages one building.
| How the deductible applies | Calculation | Owner pays first |
|---|---|---|
| 2% of the damaged building’s value | 2% × $4,000,000 | $80,000 |
| 2% of total insured value at the location | 2% × $12,000,000 | $240,000 |
| 5% of total insured value | 5% × $12,000,000 | $600,000 |
The wording sits in the deductible endorsement, and two policies with the same “2%” can leave you with very different bills. Some policies also set a dollar minimum, so a 1% deductible on a small building still starts at a fixed amount. Check whether “value” includes contents and business income, because many do.
Named-storm deductibles usually apply only to storms the National Hurricane Center or National Weather Service has named. A wind or hail deductible applies to any wind event, including a derecho like the one in May 2024, so read which kind your policy uses.
TWIA and why most of Houston is outside it
The Texas Windstorm Insurance Association is the state’s wind insurer of last resort. It only writes property in the 14 first-tier coastal counties and the part of Harris County east of Highway 146. Most of Houston, including Katy, the Energy Corridor, Sugar Land and Cypress, is outside that area, so wind coverage there has to come from the private market.
Even inside the TWIA area, TWIA has limits that matter at this size. Its current maximum for a commercial structure and its contents is $4,424,000, so a $10 million building in Galveston or Corpus Christi would still need private wind above that. Most buildings of that size buy their wind privately anyway. Applicants must also have been turned down by at least one private insurer writing wind in the area, and the building must meet the windstorm building code, with a WPI-8 certificate from TDI or TWIA.
Flood is a separate policy
Wind policies, including named-storm policies and TWIA, exclude flooding from rising water. Harvey’s damage across west Houston was mostly water, and some of it reached offices in the Energy Corridor and Memorial that had never flooded before.
The National Flood Insurance Program writes up to $500,000 on a commercial building and $500,000 on its contents. For a $12 million center that’s a fraction of the value, so owners who need more buy private flood or excess flood above the NFIP policy. A new NFIP policy generally has a 30-day waiting period before it takes effect. Buying it when a storm is already in the Gulf is too late.
What underwriters ask for
Underwriters price what they can see. Incomplete submissions get declined or quoted high because the underwriter assumes the worst. Expect to provide:
- A statement of values listing each building, its square footage and its replacement cost, plus contents and business income
- Five years of loss runs from your current and prior carriers
- COPE details: construction type, occupancy (what each tenant does), protection such as sprinklers, alarms and hydrant distance, and exposure, meaning what’s next door
- Year built, plus the year the roof, wiring, plumbing and HVAC were last updated
- Roof type and any wind mitigation, such as hurricane straps or impact-rated glass
- Your non-renewal or declination letter, if you have one
What owners can do before renewal
Start 90 to 120 days before the policy expires. Wind capacity on large Houston buildings fills up, and the carriers that still have room fill it with the submissions that arrive first and complete.
Update the statement of values. Values that haven’t moved in five years tell an underwriter the building is underinsured, and some carriers apply a coinsurance penalty at claim time when values run too low.
Document the roof. Get the replacement or recoating invoice, the roof type and recent photos. If the roof is near the end of its life, replacing it before renewal can change which carriers will quote.
Ask for deductible options. Comparing 2% and 5% on the same building, in dollars, is the clearest way to see what you’re paying for.
Fix what an inspector would flag, such as an expired sprinkler inspection or untagged fire extinguishers. Underwriters read small housekeeping items as a sign of how the whole property is run.
Where Tree Insurance Agency fits
Tree Insurance Agency is an independent agency, which means we work with many carriers instead of selling one company’s policies. With more than 150 carrier partners, including wind specialists, we can shop the primary, the wind layer and the flood at the same time and make sure they fit together. Our Katy office handles most of the Houston property work.
If you have a non-renewal letter, send it with your statement of values through our property quote request. A licensed agent will tell you which markets can still write the building.
Common questions
Usually because the carrier holds too much wind exposure in your area. Carriers limit how much insured value they keep in one hurricane path, and when reinsurance costs rise they cut large buildings first. Roof age is the other common reason. Your non-renewal letter should state the reason, and it tells us which markets to approach.
A named storm deductible is the amount you pay on a claim caused by a storm the National Hurricane Center has named. On Houston commercial property it’s usually a percentage of insured value, often 1% to 5%. A 2% deductible on a $4 million building is $80,000, and the amount grows if the percentage applies to the total value of every building at the location.
Surplus lines carriers are legal in Texas when they’re on TDI’s eligible list and placed through a licensed surplus lines agent. The difference is that they aren’t covered by the Texas guaranty association if the carrier fails, and every policy says so in a printed notice. That makes the carrier’s financial rating worth checking before you buy.
Only partly, and only inside the TWIA area. TWIA writes the 14 first-tier coastal counties and the part of Harris County east of Highway 146. Its current maximum for a commercial building and contents is $4,424,000, so anything above that needs private wind coverage. Most of Houston is outside the TWIA area entirely.
The National Flood Insurance Program writes up to $500,000 on a commercial building and up to $500,000 on its contents. Higher-value property usually adds private or excess flood above the NFIP limit. A new NFIP policy generally takes 30 days to start, so buy it well before hurricane season.
Related coverage
Sources
- Texas Windstorm Insurance Association: Coverage and eligibility
- Texas Windstorm Insurance Association: Fact Book, Q1 2026 (maximum limits)
- Texas Department of Insurance: Surplus lines insurance guide
- Texas Department of Insurance: Surplus lines companies
- Surplus Lines Stamping Office of Texas: Diligent effort
- Surplus Lines Stamping Office of Texas: Mandatory guaranty fund notice
- FEMA: Flood insurance
- FEMA: You need flood insurance for your business too