When Does the Insurance Market Shut Down for New Coverage?
With Tropical Storm Bertha currently heading toward Southeast Texas, the insurance market has already begun closing its doors for new policies and coverage changes in affected areas. Here is exactly how the shutdown process works and when it kicks in.
What a Binding Moratorium Is
A binding moratorium is a short-term rule that stops insurance companies from selling new policies or making changes to existing ones. Companies use this rule when a big risk, like a wildfire or hurricane, is close by — and the main goal is to protect both the policyholder and the insurance company from catastrophic losses. Most carriers dictate that once NOAA has issued a hurricane watch or warning, coverage cannot be written until a certain number of hours after the watch or warning expires. During a moratorium, you can still renew existing policies and file claims as needed — but you cannot buy new coverage or increase existing limits.
TWIA's Moratorium: The Most Critical Trigger for Texas
The Texas Windstorm Insurance Association has the clearest and most consequential moratorium rules for coastal Texans. TWIA cannot issue a new windstorm insurance policy or increase coverage on an existing or renewal windstorm insurance policy when there is a hurricane in the Gulf — and a TWIA policy moratorium applies to the entire TWIA coverage area, covering the 14 Texas coastal counties and parts of Harris County east of Highway 146. With Tropical Storm Bertha having already made landfall in Louisiana and heading toward the Texas coast, this moratorium is almost certainly in effect right now for Southeast Texas.
Private Insurers Shut Down at the Same Time
The moratorium is not limited to TWIA. Citizens Property Insurance Corporation suspended new coverage statewide after 11 a.m. on July 19 — the restriction applies whenever the National Hurricane Center issues a tropical storm or hurricane watch or warning for any part of the coast, preventing property owners from purchasing or increasing coverage once a storm is approaching. Most private carriers in Texas follow the same protocol — once the NHC issues a watch or warning, the market freezes for new business until the threat fully passes.
Moratoriums Can Apply to Wildfires Too
Hurricane season is not the only time the market shuts down. In February 2024, the Texas FAIR Plan Association made a binding moratorium, stopping new insurance in some Texas Panhandle counties because wildfires were spreading rapidly — helping lower risk during a dangerous time. Any rapidly developing catastrophic risk can trigger a binding moratorium at any time of year.
When the Market Reopens
Coverage does not automatically become available the moment a storm passes. Moratoriums typically remain in effect until a certain number of hours after the watch or warning officially expires — meaning the market stays closed even after a storm has moved inland and weakened. You cannot buy new insurance or increase coverage during a moratorium, but you can usually renew existing policies and file claims as needed — and planning ahead and staying informed about local moratoriums ensures you can safeguard your property effectively before disaster seasons begin. With Bertha arriving Thursday and the NFIP authorization deadline approaching September 30, the window to get fully covered in Texas is closing from both ends simultaneously.
