Homeowners, Windstorms, & Insurance

Homeowners in Flower Mound, Haslet, Saginaw, Newark, Benbrook, Crowley, Cedar Hill, Hutchins, Grand Prairie, Arlington, Mansfield, Weatherford, or anywhere else in Texas will have insurance on their homes. Most, if not all are concerned about the cost of their insurance and the coverages provided by their policy if they suffer a loss.
Even though it is not often a problem for homeowners in the towns and cities listed above, homeowners along the gulf coast areas of Texas, will many times have problems getting coverage for wind damage to their homes. When they can get their standard insurance carrier such as State Farm, Allstate, Farmers, or one of the other standard companies to provide coverage, it is at an expensive cost. So what can they do to get coverage and get it at a cost they can afford?
The answer is to get coverage through the Texas Windstorm Insurance Association (TWIA). Homeowners along the gulf coast still have to pay premiums that exceed thousands of dollars for coverage through TWIA. In spite of these already expensive rates, the TWIA has asked the Insurance Commissioner, Mike Geeslin, to allow a rate increase of 5 percent starting next year.
Writer, Purva Patel, for the Houston Chronicle, wrote an article that was published on June 23, 2010. This article, titled, “Windstorm insurer wants 5 percent annual rate increase,” explains some of the reasons that TWIA is asking for the rate increase. The TWIA board voted 5 to 3 to raise rates 5 percent next year, with the intention of filing the same increase each of the following four years.
The TWIA sells wind coverage to owners of hurricane vulnerable homes who can’t buy it elsewhere. The article by Purva Patel discusses reasons for the rate increases and where TWIA gets its money,
At the same time that TWIA is considering and asking for these rate increases, it is noted that policyholders who are still recovering from hurricanes Ike and Dolly, won’t be able to afford higher rates. TWIA has received over 92,000 Ike related claims and continues to receive about 12 to 15 a week. TWIA is said to have paid nearly $1.6 billion in Ike losses to date and expects to pay out a total of $1.9 billion.
TWIA is simply running out of money according to its spokespeople and must have the rate increases to stay viable.
Senator Mike Jackson, La Porte, have opted to give TWIA the ability to issue bonds which would be less costly to them and lessen the need to increase premiums.