Author Topic: Coastal property owners demand insurance handouts  (Read 427 times)

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Coastal property owners demand insurance handouts
« on: December 09, 2019, 12:34:58 pm »
Houston Chronicle by  Chris Tomlinson Dec. 9, 2019

Owners of hurricane-prone properties are trying to pass the price of their high-risk choices onto all Texas property insurance holders this week, manipulating a little-observed corner of state politics while most of us are not paying attention.

Coastal home and business owners will crowd into a Texas Wind Insurance Association meeting in Corpus Christi on Dec. 10 and refuse to pay their fair share. They want you and me to subsidize more of the cost of insuring their property or rebuilding it when the next storm hits.

Texas’ 367 miles of coastline exposes the state to all dangers the Gulf of Mexico can muster. Every two-to-five years, the warm water produces a storm capable of literally blowing the roofs off our economy. The problem for policymakers and the public is how to insure against those predictable disasters.

Whether due to location or condition, a market-based premium to insure some coastal properties would exceed what anyone can pay. To provide affordable wind and hail coverage for those properties, the Texas Legislature formed the Texas Wind Insurance Association.

This quasi-governmental entity requires private insurance companies to put aside $1 billion for about 200,000 high-risk properties; a cost passed on to the rest of Texas’ property insurance policyholders.

TWIA, pronounced TWEE-ah, is also obligated to collect premiums from the property owners who depend on it, as well as issue bonds to ensure it can pay claims. But Hurricane Harvey and other storms have drained TWIA’s reserves and used up all the bond money, creating a financial crisis.

Owners of high-risk properties have only made matters worse. They have fought every attempt by TWIA’s board to raise premiums to an appropriate level. According to 2019 forecasts by an independent actuary, TWIA’s residential premiums are 40 percent below what is necessary to maintain solvency, while commercial rates are 50 percent inadequate.

More: https://www.houstonchronicle.com/business/columnists/tomlinson/article/Coastal-property-owners-demand-insurance-handouts-14881900.php