For many Gulf Coast businesses and homeowners, Texas's main insurance regulator has rejected a planned 10% rate increase.
On Monday, Texas Insurance Commissioner Cassie Brown turned down the proposed hike for residential and commercial customers sought by the Texas Windstorm Insurance Association, the state's last-ditch insurer for Gulf Coast homes and companies.
Given the problems it would create on the coast, a hike would make such an increase unfair and unjust; Brown penned in a Monday filing rejecting the planned hike. Brown mentioned publically testifying property owners, corporate groups, and school district officials who said the hike would be expensive.
Celebrating its rejection, State Rep. Todd Hunter, a Corpus Christi Republican who mobilized opposition to the proposed raise, expressed gratitude.
Brown's denial coincides with Texas property owners paying some of the highest insurance rates in the country and legislators looking for methods to control those expenses. An S&P Global study shows that homeowners' insurance prices in Texas increased by more than 23% last year, surpassing all other states; this outcome of several catastrophic weather occurrences combined with growing property values.
Coastal property owners have increasingly sought wind and hail insurance through TWIA — which essentially pools private property and casualty insurers who provide policies to properties in the state's 14 coastal counties as well as areas in Harris County, the most populous urban county — as they have struggled to find coverage through private insurers in recent years.
TWIA leaders contended the group required additional money to cover its base of policyholders and pay for increased construction and labor expenses to rebuild damage from hurricanes. They did admit, though, that a 10% rise would not be sufficient to cover those expenses entirely.
Following Hurricane Beryl, which CoreLogic estimates to have caused at least $2.5 billion worth of damage in Texas, TWIA's board of directors authorized the suggested August hike. The association has paid out around $259 million in claims emanating from the disaster as of right now. Eventually, TWIA executives predict the group would empty a $450 million reserve fund to cover Beryl-related claims.
A rate hike will simply "exacerbate the burdens" coastal property owners still recovering from Hurricane Beryl face, Brown explained.
When legislators gather in Austin next year, Lt. Gov. Dan Patrick and House Speaker Dade Phelan have indicated they want legislators to address the state's growing insurance expenditures. Brown observed that the money for TWIA will probably be viewed differently.
"We look forward to working with legislators to address these significant issues to ensure that TWIA has the financial capacity to pay claims for our policyholders when they need us," said Aaron Taylor, senior legislative and external relations expert for TWIA.