Texas Insurance Commis- sioner Mike Geeslin recently ordered residential rates for windstorm coverage from the Texas Windstorm Insurance Association to remain the same, but allowed for a 5 percent increase in commercial rates. TWIA is the insurer of last resort for wind and hail coverage in 14 coastal counties and parts of Harris County. TWIA’s Board of Directors advocated a 10 percent increase in both residential and commercial rates.
“Windstorm rates for the Texas coast have been historically inadequate,” said ICT Executive Director Rick Gentry. After the recent hurricanes, “to set a zero percent increase for windstorm rates for residents who have built their homes directly on the water’s edge is difficult to comprehend.”
Commenting on the rating decision, Commissioner Geeslin stated, “Based on the actuarial data reviewed by my staff and on economic hardships suffered by many Gulf Coast residents as a result of Hurricane Rita, I cannot support residential windstorm rate increases at this time. Once additional data on future reinsurance costs and losses from Hurricane Rita are available, another rate review will be conducted. Actuarial data available now, however, does support a modest 5 percent increase in commercial windstorm rates.”
Jerry Johns, a TWIA spokes-man, said the insurer “expects between 10,500 and 11,000 claims associated with Hurricane Rita with an estimated cost of $125-150 million.” He added the recent active hurricane season could raise reinsurance costs by as much as 20 percent or more.
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