The Texas Windstorm Insurance Association was already unpopular in Port Aransas – the town asked the state to investigate the association earlier this year, claiming low – and slow-claims payments.
So when on Wednesday news spread of the TWIA Board of Directors’ 5-4 vote to raise premiums on all policies by 10 percent, no one had anything nice to say, including Port Aransas Mayor Charles Bujan.
“What I have to say you won’t be able to print.”
(If approved by the Texas Department of Insurance, the increase will take effect January 1, 2019, according to a statement from the association.)
Mayor Bujan has been a fierce TWIA critic and invited us to drive around town to see all the properties still wrapped up in TWIA’s claims process.
TWIA’s VP of Legislative Affairs and Communications, Jennifer Armstrong, says the association did not make the decision, lightly.
“It’s certainly not our intent…to minimize that hardship.”
But, Armstrong pointed out that TWIA, which is state’s insurer-of-last-resort for property owners in Texas’ Coastal Counties, including a sliver of the greater Houston area, has paid about $1.6 billion since Harvey made landfall.
And, as of the latest update, about 4,000 claims remain open.
But there’s another facet that rarely enters into the broader dialogue about TWIA. Namely, that TWIA’s actuarial experts believe premiums on all policies should actually be about 35 percent higher than they are.
It’s known as “rate inadequacy,” and Armstrong says the association is obligated to address it.
“We … have to make sure that we have funds necessary to pay claims in future situation like ‘Harvey,’ which is the purpose of moving towards rate adequacy.
Coastal lawmakers immediately wrote letters in response to the decision, one who said he was “infuriated,” while calling on the Texas Insurance Commissioner to disapprove the hike.
Nueces County Commissioner Brent Chesney, whose area includes Port Aransas, says he plans to spend time in Austin, next session, reminding inland lawmakers of their promises to help the coast, just after Harvey made landfall.
He says the TWIA board’s decision to raise rates, is “ridiculous. It’s absolutely ridiculous. To pile on somebody who is trying to recover…it’s wrong and it’s not equitable.”
Note: TWIA has confirmed the “Salty Dog Saloon,” mentioned in a previous draft of this story, does not carry TWIA windstom coverage.
KRIS 6 has removed the reference.