Insurance Dispute Lawyer Blog
Texas’ state-run wind damage insurance program has fallen into financial crisis as a result of settlements and payouts in the face of recent hurricanes. Insurance reform has been pushed to the top of Governor Perry’s priority list in the new legislative session but things are not looking good for the program:
An arduous task is ahead for Texas legislators as they continue to hammer out measures meant to shore up the state’s property insurance market in time for this year’s hurricane season, which begins June 1.
While it continues to pay claims from Hurricane Ike last September, the state-run Texas Windstorm Insurance Association is in a “severe financial crisis,” said Jerry Johns, president of the Southwestern Insurance Information Service and a spokesman for TWIA, which he said has depleted the Catastrophe Reserve Trust Fund. In addition, reinsurance expires May 31, he said.
“If TWIA was in the private market, it would be in receivership,” he added.
TWIA used up all of the cash it had on hand after Hurricane Dolly in July 2008 and dipped into the cat fund. The association assessed its member insurers $100 million before the larger Ike made landfall in the state in September. In its aftermath, TWIA assessed insurers another $430 million in order to be able to tap into reinsurance to pay claims (BestWire, Sept. 15, 2008). TWIA expects $2.7 billion in losses from Ike.
This is not good news as Florida’s state-run insurance programs will be burdened by State Farm’s departure and shows a severe problem that may become more and more prevalent and worrisome as years go on. It is important for property and home owners to maintain proper insurance as time wears on because full protection with legal assistance is one of the only solid manners in which policy holders can prevent troubles in the future should damage befall them.