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6 Investigates: What’s not working with windstorm insurance

Posted: 11:09 AM, Jun 08, 2018
Updated: 2018-11-06 09:19:45-05

An insurance system created to help the Texas coast rebuild after a hurricane has become the ire of many coastal leaders and one state lawmaker is calling for reform. This is Part 2 of a story about the windstorm insurance system’s response to Hurricane Harvey. Click here to read Part 1 .

A clock in the Port Aransas mayor’s office isn’t for keeping time. It’s a reminder.

“Here is when the eyewall of Harvey roared ashore on Saint Joe,” said Charles Bujan, Port Aransas Mayor, as he pointed to the stopped clock on his office wall. “I want to always remember. Don’t play around with hurricanes.”

The exact time is 3:07 a.m. August 17th, and it’s the moment Port Aransas, Fulton, Rockport, Aransas Pass and the surrounding cities and communities changed forever.

And these days, it’s difficult to forget. The reminders are everywhere: sounds of construction and a pile of debris as you enter the barrier island from State Highway 361. While the coastal city has seen significant strides in the past 10 months, Bujan said it will take at least another two years to fully rebuild, and even then – some businesses and residents won’t return.

And for many, one of the frustrating aspects of the recovery is navigating a windstorm insurance process. Area leaders said they hear complaints about low estimates, a revolving door of adjusters and the unknown about what’s next. Those are the problems many describe with an insurance system intended to help rebuild lives.

“They come in frustrated at us,” said Jimmy Fulton, Mayor of Fulton. “They’re frustrated with everything around them. They’re frustrated with their home and everything.”

Those hang ups are a normal part of the insurance process, said a representative with the Texas Windstorm Insurance Association, better known as TWIA.

“We feel overall we’ve been responsive,” said Jennifer Armstrong, TWIA’s Vice President of Communications & Legislative Affairs Department. “We’ve been down to the coast. We’ve had mobile claim centers.”

State lawmakers designed that system, so the Texas coast could rebuild after devastating storm damage. The Texas Legislature created it about a year after Hurricane Celia slammed into Corpus Christi in 1970. Many private insurance companies refused to write new policies on the coast. The Texas Windstorm Insurance Association (TWIA) became the answer to that problem.

Hurricane Harvey tested a recent round of reform, and exposed lingering problems, many said.

State Rep. Todd Hunter (R-Corpus Christi) helped write those laws, and watched how they were tested in his coastal community. He’s not happy with the outcome.

“I think I share along with most of the area,” Hunter said. “Sometimes you do laws and the laws need to be helped.”

“The whole goal is to make life constructive getting back into your home,” he said. “Not stopping it.”

Now – he intends to take it up with his fellow lawmakers in Austin.

Part of what Hunter wants to change is the make-up of the board. He said more coastal residents should have a seat at the decision table. Beyond that, Hunter also said he will wait to hear what area leaders, businesses and residents want to change. He plans to form a task force and organize the coast to have a strong presence in Austin when the next legislative session kicks off in January 2019.

But did lawmakers design a system that made it difficult and at times unfair for those who suffered the worst damage?

Hunter had this to say: “Is it designed that way? I don’t believe it’s designed that way. Has it developed that way? I think a lot of people think it has. So we need to make modifications.”

But area leaders say it’s more than just TWIA.

“It’s not only directed at TWIA, Bujan said. “It’s directed at insurance companies. Period. And it’s a real mixed bag.”

While TWIA is the main provider for windstorm insurance. There has been a push in recent years to spread the risk. That means there are private companies now offering windstorm insurance. The process is known in Austin as “depopulation.” So has that worked?

“We’re not sure yet,” Hunter said.

Hunter says that’s because it’s too soon to tell. The deadline for the private carriers to pay claims hasn’t hit yet. Meanwhile, TWIA claim deadline is June 1.

So what happens if a hurricane hits Texas this year? Will TWIA have the money to pay back-to-back claims?

“It remains to be seen,” Armstrong said. “There are certain things we have to consider.”

And those considerations are turning into action.

In early May, the TWIA board used its power to request that insurance companies pay $321 million by the end of this year. That assessment is part of TWIA’s financial plan to get ready for the next hurricane season.