Coastal business chambers urge public to comment against new TWIA proposed rate hike

[TexasTowelie]

CORPUS CHRISTI — The United Corpus Christi Chamber of Commerce along with the Port Aransas, Ingleside, Rockport-Fulton, Portland and Aransas Pass chambers hosted a press conference early Monday morning, July 29, at the Solomon P. Ortiz Center to alert the media and the public about the Texas Windstorm Insurance Association’s (TWIA) plan to raise rates by 10 percent on policyholders.

In a press release, the United Corpus Christi Chamber of Commerce said that the increase comes at a time when many in the Coastal Bend are still recovering from Hurricane Harvey and after rates have already risen 71 percent in the past 11 years. Raising rates will put pressure on many households not able to afford insurance, and those with mortgages possibly being pushed into default as they are unable to make increased payments.

The release also stated that rate increases are detrimental to economic development as employers seeking to locate here will find it too expensive for their employees to live here.

Now, Gulf Coast residents have an opportunity to tell TWIA “No to new rate hikes” ahead of the Aug. 6, board meeting in Galveston.

Read more: https://www.mysoutex.com/san_patricio_county/news/coastal-business-chambers-urge-public-to-comment-against-new-twia/article_e3b26924-b220-11e9-88c7-2b8cb2b94bb3.html

[Hangingon]

1. I hope TWIA raises their rates.

People will then go to private insurance. Hopefully that will put TWIA out of existence.

[TexasTowelie]

2. Not very likely.

The policies that TWIA writes are for wind and hail coverage only. They do not provide flood coverage. Their rates are also lower than those provided by private insurance companies. Private insurance companies are not willing to risk increasing their market share in the coastal counties because of the risk involved and underwriting limitations set by their reinsurance companies. Therefore, some homeowners in the coastal counties may have separate policies with an insurance company, TWIA, and FEMA (for flooding) in order to meet the requirements for their mortgage.

[Hangingon]

3. Gee, thank s for the tutorial on TWIA.

I have dealt with TWIA After Harvey. They have not fully paid off the claim as yet. What money that has come has been in small spurts. Meanwhile, no living quarters but still responsible for mortgage and HOA dues. TWIA was formed to provide coverage for the coastal areas. It does cover wind related damage, FEMA covers water damage. In the year before Harvey, private insurance became available. They paid their claims quickly. Now, 2 years later we are still waiting for TWIA. Government should not be in the insurance business.

[TexasTowelie]

4. My apologies for being preachy.

I worked for TDI, but didn't know the hardships that you had faced. I think that most of the delays that occurred with TWIA was that they were underfunded with their reserves which meant that they had to wait on both TDI and the Legislature to act on their funding crisis.

I think that there is a function for the government to intervene when there are vulnerabilities in the overall insurance market. For example, in the workers compensation market there are assigned risks and the Texas WC Insurance Fund which acts as the insurer of last resort. However, I agree with you that the government should also be working to reduce their intervention and getting business back to the private market.

As far as TWIA is concerned, there certainly is an argument for having assigned risks for the coastal counties. However, one of the arguments against that proposal is that the assigned risks are based upon market share and what could occur is that insurers not only withdraw from coastal counties, but the statewide market also. I suspect that TWIA will need to continue with substantial rate hikes each year to build the reserves to handle more hurricanes in the future, but as long as the private market refuses to cover the coastal counties, TWIA will be around for the foreseeable future.

You have my sympathies for the hardship that you are going through. I know that it was tough here in Wharton when Harvey came through with the flooding in town and difficulty finding groceries. I was fortunate that I'm on the second floor in an apartment building so I didn't have to deal with property related issues, but I did have to ride the bike through about one-foot deep water to get to the grocery store and I lost Internet service for about an hour when Harvey came ashore. I know that others such as yourself were not as lucky.