Texas’ chief insurance regulator has rejected a planned 10% insurance rate increase for many Gulf Coast homes and business owners. The Texas Windstorm Insurance Association, the state’s insurer of last resort for Gulf Coast homes and businesses, sought an increase for residential and commercial policyholders, which Texas Insurance Commissioner Cassie Brown rejected on Monday.
Such an increase “would be unjust and unfair because of the hardships (it) would impose on the coast,” Brown wrote in a Monday filing rejecting the planned hike. Brown cited school district officials, business groups, and property owners who stated in public meetings that the hike would be expensive. State Rep. Todd Hunter, a Corpus Christi Republican who opposed the proposed hike, applauded its refusal. “The coast won,” Hunter said in a video broadcast on Monday on the X social networking platform.
Brown’s denial comes as Texas property owners suffer some of the highest insurance prices in the country, and lawmakers look for methods to reduce those costs. According to an S&P Global report, homeowners’ insurance rates in Texas increased by more than 23% last year, exceeding every other state, owing to catastrophic weather occurrences and rising property prices.
As coastal property owners have struggled to find coverage from private insurers in recent years, they 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 a portion of Harris County, the state’s most populous urban county.
TWIA officials stated that the organization required additional cash to provide coverage to many policyholders and cover higher construction and labor costs to repair storm damage. However, they agreed that a 10% rise would not cover these expenditures.
TWIA’s board of directors authorized the proposed increase in August following Hurricane Beryl, which CoreLogic estimates caused at least $2.5 billion in damage in Texas. This month, the association had paid approximately $259 million in claims related to that disaster. TWIA officials believe the group will eventually deplete its $450 million reserve money to handle Beryl-related claims. Lt. Gov. Dan Patrick and House Speaker Dade Phelan have indicated that they want lawmakers to address the state’s soaring insurance prices when they meet in Austin next year. Brown mentioned that TWIA’s financing will most likely be reviewed again.
“We look forward to working with lawmakers to address these important issues to ensure that TWIA has the financial capacity to pay claims for our policyholders when they need us,” said Aaron Taylor, TWIA’s senior legislative and external relations expert. Brown stated that a rate hike would merely “exacerbate the burdens” of coastal property owners still recuperating from Hurricane Beryl.
