CORPUS CHRISTI, Texas — On Monday, elected leaders, business owners and others in Corpus Christi came together to stand against a proposed 10 percent rate hike by the Texas Windstorm Insurance Association.
The gathering was in response to an upcoming TWIA Board of Directors meeting on Tuesday where they will vote on the proposal. Ahead of that meeting, 3NEWS asked TWIA to explain why they believe that an increase is needed.
TWIA was created for property owners in 14 coastal counties and a part of Harris County, who cannot find wind and hail coverage through private insurers. They now carry more than 250,000 policies.
"We have seen over the last few years that the private market is less willing to write wind coverage along the coast, and so that’s our role," TWIA Chief Actuary & Vice President of Enterprise Analytics Jim Murphy said. "When they don’t want to issue a policy, then we step in, and we do it."
Each year, TWIA estimates whether they will have enough to meet the expected demand on their resources, taking into account things like higher construction and labor costs, what the hurricane season is expected to look like and what they expect to pay for typical Texas hailstorms.
Murphy told 3NEWS that current rates are no longer adequate.
"In the long run, we really need to be able to save more in the good years to pay for the bad years, and that’s what’s underlying the rate indications," he said.
For a homeowner who already pays $2,300 a year, a proposed 10 percent jump would add another $230 to their cost and would follow a five percent increase that came in 2022.
Any increase would also affect the region still recovering from Hurricane Beryl, where TWIA says they have so far received more than 26,000 claims and counting.
"We expect Hurricane Beryl will use up all of the premiums that we will be collecting this year, and pretty much everything that we have saved up since Hurricane Harvey," Murphy said.
When asked to put that in real numbers, Murphy went on to say, "We’ve got a little over $450 million set aside that we’ve been building up since Harvey, and so I would expect that we will need more than half of that, and potentially we might need all of it to pay for Beryl.”
Murphy said there are many years where TWIA chooses not to raise rates, as they try to strike a balance between making sure that homeowners can afford to pay their insurance premiums, and also that TWIA has the financial capability to pay out claims when needed.
He encourages those who have concerns to submit email comments to the TWIA Board of Directors at publiccomment@twia.org.