Property insurance along the Texas coast is getting harder to find plus premiums and deductibles are increasing, according to results from a survey of independent insurance agents. Respondents are members of the Independent Insurance Agents of Texas (IIAT).
Current insurance market conditions are in comparison to an initial survey conducted in June 2006.
“Survey results indicate steps need to be taken to encourage insurance companies to write windstorm insurance voluntarily along the coast, while reasonably capping their exposures to losses from the mega-storms predicted for the future,” said Robert Hempkins, IIAT president.
Insurance companies have been withdrawing from writing voluntary business in Tier 1 counties (those closest to the water) for some years, according to David VanDelinder, IIAT executive director “Nearly all wind coverage in Tier 1 is written in TWIA, the windstorm pool, which officials estimate will grow to more than $40 billion in liabilities by the end of this year.”
The survey shows that companies have changed their appetite for business in Tier 2 counties as well. From June to October, nearly four times as many agents in Tier 2 report that companies have placed limitations on the amount of business they will write. Especially restricted is commercial insurance written in Harris County.
Hempkins explained that what happens to TWIA can affect property markets in the entire state. “As companies write more business in Texas, they become responsible for a greater share of the losses in TWIA. As TWIA grows, so does a company’s potential losses.”
As markets become more restrictive, insurance is costing coastal policyholders more. More than twice as many agencies in Tier 2 reported an increase in premium greater than 20 percent in October compared to June. At the same time, insurance companies are increasing mandatory deductibles for both homeowners and businesses. Homeowners policies are written with a 2 percent deductible in most agencies in Tier 2. Commercial deductibles of 5 percent or higher are increasing in many counties.
Hempkins commented, “If the coast is as important to our state economy as we think it is, then all policyholders in Texas have a stake in the insurance markets on the coast and should participate in some manner in the solutions. We urge the state legislature to address TWIA funding at the earliest possible moment.”
Complete survey results can be found online at www.iiat.org/pub/issues/is_twia_Pub.asp.
Source: IIAT
Was this article valuable?
Here are more articles you may enjoy.
Cracks in O’Hare Columns Aren’t Insured Property Damage, Just Bad Product – Court 
Viewpoint: The 10 Major Risks Shaping Insurance Today 
Reserve Strengthening for Casualty Lines Not Over: Moody’s 
Progressive Set to ‘Maximize’ Growth, Building on Q1 
