Windstorm Insurance Rate Hike Recommendation Delayed Again

The Texas Windstorm Insurance Association has been wrestling with the issue of whether to hike rates for about two years. There was another delay on Tuesday.  

TWIA’s Actuarial and Underwriting Committee voted 4-3 to delay a recommendation to the full board until the end of November, when it expects to receive additional modeling data from staff and an independent consultant hired to review rates. 

State Sen. Juan Hinojosa (D-McAllen) and state representatives Abel Herrero (D-Robstown), Todd Hunter (R-Corpus Christi) and Mayes Middleton (R-Galveston) all said now is not the time to raise rates.

“Our coastal communities do not need any additional burdens placed on them as they battle COVID-19 and worry of major storms damaging their homes and businesses,” said Herrero during the committee’s Zoom meeting. “Any rate hikes would be devastating and cruel to our friends and neighbors trying to survive these difficult times.”

“TWIA’s hurricane models overestimate actual losses from recent hurricanes like Ike, Katrina and Andrew by 17 to 31%,” Middleton said. “We need to get to the bottom of that before we look into any rate changes at all.”

A total of 21 state lawmakers have signed a letter requesting that TWIA forego a rate increase. They want TWIA to set the issue aside to allow for discussions expected during the 2021 legislative session that could help mitigate losses. Fortified construction and funding for it is one idea on the table. 

Consultants Willis Towers Watson found that TWIA’s rates are 32% below where they should be for residential property and 44% less than warranted for commercial property. Staff analysis has pegged the rate deficit at 44% and 49% for residential and commercial coverage, respectively.

TWIA’s Actuarial and Underwriting Committee will meet again the week of Nov. 30. Any recommendation from that meeting will be taken up by the full board at its quarterly meeting in December.