Seller’s Disclosure Insurance Questions: What Section 5 Now Asks

The 2026 Texas Seller’s Disclosure Notice added a section that didn’t exist before, and it lands harder in Houston than almost anywhere else in the state. The seller’s disclosure insurance questions in Section 5 ask what coverage the property currently carries, and then ask something more uncomfortable: whether you have ever been unable to insure it. Sellers pause on that line more than any other on the form. Here’s what the section actually asks, what an honest answer looks like, and why I’d rather you answer it plainly than leave it blank.

The short version: Section 5 of form TXR 1406 asks four yes-or-no questions — whether the property is presently covered by insurance, by flood insurance, and by windstorm insurance, and whether you have “been unable to insure the Property for any reason.” A yes on any of them opens an explanation box. That box is where a scary-looking checkbox becomes a manageable fact.

What Section 5 actually asks

The section is short. Here are the four lines as the form words them:

• The Property is presently covered by insurance.
• The Property is presently covered by flood insurance.
• The Property is presently covered by windstorm insurance.
• You (Seller) have been unable to insure the Property for any reason.

Underneath the flood line, the form carries its own footnote: homes in high-risk flood zones with mortgages from federally regulated or insured lenders are required to have flood insurance, and even where it isn’t required, FEMA encourages coverage in high, moderate and low risk zones alike. Then one instruction governs the whole section — “If the answer to any of the items in Section 5 is yes, explain.”

Read that instruction carefully, because it cuts both ways. A yes on the first three lines is good news about the house and still requires an explanation. A yes on the fourth is the one people worry about. Either way, the form gives you room to say what happened, and the explanation is worth more to a buyer than the checkbox is.

The question that stops sellers: “unable to insure”

This is the new one, and it’s broad on purpose. It doesn’t ask whether you were denied by a specific company on a specific date. It asks whether you have been unable to insure the property for any reason. In practice that covers being declined outright, being non-renewed, or being unable to obtain coverage on a particular structure or peril.

What it does not cover is shopping around and deciding the price was too high. If a carrier made you a real offer and you walked away from the number, you were able to insure the property and you chose your own reasons. Where the line gets genuinely blurry — an offer so restricted or so expensive it wasn’t real — that’s a conversation to have with your insurance agent before you check a box, because they have the underwriting record and I don’t.

Here’s my position, and it’s the same one I take on every part of this form. Answer it honestly and use the explanation box. A buyer who reads “yes, non-renewed in 2024 after a hail claim, re-covered since with a different carrier, current policy attached” learns that the house is insurable and you dealt with it. A buyer who reads a bare “yes” with no explanation imagines something worse than the truth. And a buyer who reads “no” that turns out to be wrong has a much more serious conversation with you later.

There’s a practical reason honesty wins here that has nothing to do with ethics: the buyer’s own carrier is going to find out. Underwriting pulls loss history and prior-coverage data. If the house has a story, it surfaces during the option period anyway, and it surfaces at the worst possible moment — when your buyer is deciding whether to trust the rest of your disclosure.

If you have been declined, know what the FAIR Plan is

Sellers who answer yes to that fourth question often assume the house is uninsurable. Usually it isn’t. Texas has a residual market for exactly this situation: the Texas FAIR Plan Association, created by the Legislature in 1995 and activated by the Texas Department of Insurance in 2002 under Chapter 2211 of the Insurance Code.

The eligibility rules are strict, and they matter before this comes up in your transaction. To qualify, an applicant has to have been declined by at least two insurers licensed to write and actually writing property insurance in Texas, with proof of those declinations. Anyone holding a current policy, a renewal offer, or a comparable offer from a licensed carrier is not eligible. And the FAIR Plan sells nothing directly and employs no insurance agents of its own, so an application goes through a licensed insurance agent.

It is an insurer of last resort, and its coverage is deliberately narrower than what the voluntary market offers. That matters for your buyer’s payment math and for their lender, which is why it belongs in the explanation box early, so it never surfaces as a surprise in week three.

The windstorm wrinkle, if you’re in the catastrophe area

Section 5 asks about windstorm coverage separately from ordinary insurance, and there’s a reason. Elsewhere on the form, the notice warns that if the property sits in a seacoast territory designated a catastrophe area by the Commissioner of the Texas Department of Insurance, it “may be subject to additional requirements to obtain or continue windstorm and hail insurance,” and that “a certificate of compliance may be required for repairs or improvements.” The form points you to Information Regarding Windstorm and Hail Insurance for Certain Properties (TXR 2518), the Texas Department of Insurance, and the Texas Windstorm Insurance Association.

Locally this splits the metro in a way that surprises people. TWIA’s area covers the 14 first-tier coastal counties plus the part of Harris County east of Highway 146, so Seabrook, La Porte and Shoreacres are inside it and Cypress, Katy and Copperfield are not. If you’re selling inside that area and you re-roofed without the certificate, that gap can follow the house to closing. Getting it sorted while you’re preparing to list is far easier than getting it sorted while a buyer’s lender waits.

Away from the coast, wind and hail generally sit inside the regular homeowners policy, often with their own deductible, so for most Houston sellers the windstorm line is a straightforward yes or no.

What to do before you fill in Section 5

Pull your declarations page before you answer anything. It tells you what perils you actually carry, which answers the first three lines without guessing, and it shows the wind-and-hail deductible your buyer will ask about. If your coverage has changed in the last few years, put your insurance agent on the phone and ask them to walk the history with you — declined, non-renewed, or repriced are different events, and the distinction is exactly what the fourth line turns on.

Then write the explanation as if you were the buyer reading it. Dates, what happened, what changed since. Two or three sentences will do more for your sale than a blank line ever will.

Sections 6 and 7 sit right underneath and ask a related but separate set of questions about claims you’ve filed and proceeds you received without making the repairs. Those deserve their own walkthrough and I’ll give them one. For the wider picture of what the notice covers and who’s exempt from providing it, start with what Texas sellers actually have to disclose, and if you want the buyer’s side of the same form, that’s what the disclosure tells a buyer and the right to terminate.

Last updated: August 2026 · Section references are to the Texas REALTORS® Seller’s Disclosure Notice, form TXR 1406 (06-15-26). This is general information about the disclosure form — not legal advice, and not a recommendation about any insurance product, carrier or policy. Eligibility, coverage and underwriting practices vary by company and by address. For your specific situation, talk with a licensed insurance agent, your title company, and a Texas real estate attorney.

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