Is Your Windstorm Coverage in Jeopardy?
The Texas Windstorm Insurance Association was created in 1971 to provide windstorm and hail coverage to those unable to get insurance from other carriers. Unfortunately, the TWIA has been in financial trouble after getting hit with losses from Hurricane Ike in 2008, to the tune of over $2.5 billion!
Now there are concerns being voiced at the state capitol in Austin about the solvency of the TWIA. The Board of Directors called a special meeting next week to talk about asking the Texas Department of Insurance to put TWIA into ‘receivership’ or ‘rehabilitation,’ which is basically like reorganizing through bankruptcy. Insureds still waiting for windstorm claims could be affected if this happens, and it could make getting coverage in certain coastal regions almost impossible.
TWIA is currently $183 million in debt, because the monthly premium income of $30-40 million is not enough to pay the $2.5 billion in litigation from Ike. They expect to be able to recover from this loss as the claims from Ike decline.
Bipartisan legislators and the IIAT (Independent Insurance Agents of Texas) are urging the Texas Department of Insurance to delay putting TWIA into receivership, and give the legislature more time to come up with a funding solution.
So if another big hurricane heads our way this season, are we covered?
Even if the TWIA does go into receivership, they would still be able to issue new policies, renew policies and fulfill obligations under existing policies.
We’ll keep you updated on this story as it unfolds in Austin. More answers about the potential rehab of TWIA here.