Which statement best describes TAIPA's purpose?

Which statement best describes TAIPA's purpose?

• A. TAIPA is a mechanism for assigning member insurers to auto liability applicants who cannot obtain coverage elsewhere.
• B. TAIPA handles homeowners' insurance.
• C. TAIPA is a government agency.
• D. TAIPA provides excess private passenger auto liability coverage

Answer: (A)

TAIPA functions as a residual-market mechanism for auto liability insurance in Texas. Its purpose is to ensure that drivers who can’t obtain auto liability coverage in the voluntary market still have access to coverage by having member insurers assign policies to those applicants. It isn’t a homeowners insurance program, it isn’t a government agency, and it doesn’t provide excess auto liability coverage—TAIPA provides the standard auto liability coverage through participating insurers when the ordinary market won’t insure the driver.

TAIPA functions as a residual-market mechanism for auto liability insurance in Texas. Its purpose is to ensure that drivers who can’t obtain auto liability coverage in the voluntary market still have access to coverage by having member insurers assign policies to those applicants. It isn’t a homeowners insurance program, it isn’t a government agency, and it doesn’t provide excess auto liability coverage—TAIPA provides the standard auto liability coverage through participating insurers when the ordinary market won’t insure the driver.