A new Texas law will prohibit the use of premium financing arrangements for windstorm insurance policies issued by the Texas Windstorm Insurance Association (TWIA), starting in 2026.
House Bill 2518, passed by the Texas Legislature in May and signed into law by the governor, bars policyholders from using third-party financing to pay TWIA premiums. The law takes effect September 1, 2025, and applies to all TWIA policies issued or renewed on or after January 1, 2026.
The bill adds a new subsection (c) to the Texas Insurance Code, Section 2210.2032. It reads: "Due to the availability of multiple installment payment plans directly through the association at no additional cost to the insured, the use of premium financing arrangements is prohibited." The bill passed the House with a 120-15 vote on May 2, and cleared the Senate with a 28-2 vote on May 25. The governor has since signed it into law.
TWIA has offered its own no-cost installment payment plans since January 2021, following a 2019 law (Senate Bill 615, 86th Legislature) that required the association to do so. House Bill 2518 eliminates the option for policyholders to use alternative payment plans arranged through premium finance companies.
The new restriction applies only to policies issued by TWIA. It does not affect private-market insurance carriers that offer windstorm coverage in parts of the same geographic region. Those policies can still be financed through traditional premium financing options.
For agents and brokers, the removal of premium finance options means policyholders will need to work directly with TWIA to set up installment plans. It also means finance companies will lose a slice of business in a region where windstorm coverage is essential, and often expensive.
