Commissioner’s Bulletin # B-0048-98

This bulletin is being issued to provide information regarding the Public Protection Classification for Cities and Towns that have been annexed into city limits.

Property insurance rating is based in part on the location of the property to be insured. The insurance premium for property located within the city limits of a city or town is less than for property located outside of the city limits. The insurance industry uses a Geographical Underwriting System to identify the location of a specific property for application of the appropriate Public Protection Classification. The Public Protection Classification is one of the factors used to determine the applicable premium to be charged on a residential property policy. The Texas Department of Insurance has become aware of several instances where specific property has been identified as being outside the city limits of a city or town when in fact the property is located inside the city limits. A geographical underwriting system is an acceptable means of identifying the exact location of property, however, correct identification depends on the accuracy of information reported and entered into the system.

We are issuing this notice to cities and towns in Texas to encourage the submission of all information regarding annexations of new areas into the city limits of a city or town to the Insurance Services Office or to the Texas Department of Insurance as quickly as possible after annexation has occurred. The supplemental annexation information can be entered into the geographic underwriting system to ensure the accuracy of the identification of the location of any given property in Texas. Availability of updated annexation information will reduce the possibility of incorrect insurance premiums being charged for properties located in areas that have been annexed into a city or town. Consumers who believe their property has been incorrectly rated due to a change in the city limits of a city or town should contact their agent or insurer to verify the location of the property and that the appropriate public protection classification has been used to determine the policy premium.

Annexation information should be submitted to one of the following:

Questions regarding this notice may be directed to Mr. Ike Williams.

Alexis Dick
Deputy Commissioner
Inspections Group, MC 103-1A