Texas Windstorm Insurer Sued for Passing on Ike Costs to Policyholders

April 2, 2014

A Corpus Christi man is suing the Texas Windstorm Insurance Association for hundreds of millions of dollars because he says it improperly passed on costs to policyholders like him after Hurricane Ike in 2008.

Ramiro Gamboa filed the lawsuit on March 31, The Austin American-Statesman reported.

The often-sued association is the state’s insurer of last resort for homeowners and businesses that cannot find commercial insurance because of the risk of hurricanes or severe storms.

The lawsuit says Ike left the Texas coast with more in damages than the association had in reserves, and the additional $600 million in losses should have been paid for by insurance companies that subsidize the group’s coverage – not by charging policyholders more.

Mark Kincaid, Gamboa’s lawyer, said the association should have assessed insurers and instead, “they took it from policyholders’ premiums.”

A spokeswoman for the association did not immediately respond for comment.

The association was formed in 1971 after property insurers quit doing business in coastal parts of Texas because of expensive devastation from Hurricane Celia a year earlier. It now operates as a “pool” of all property insurers in Texas and forces them to cover extraordinary damages in cases of major disaster.

Other lawsuits filed against the association include lawyer Steve Mostyn’s attempt to recover money from the association for the Brownsville school district, which he has said was denied claims following Hurricane Dolly in 2008 due to racist adjusters.

Mostyn and other lawyers have also represented thousands of clients who sued the association for hundreds of millions of dollars over botched claims following Hurricane Ike in 2008 and other storms.

 

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Latest Comments

  • April 3, 2014 at 2:53 pm
    Doug J says:
    And don't forget about lawyers going to law school to learn how to steal legally! I bet Mostyn doesn't live in a Tier one home. He continues to ravage TWIA and it just goes ... read more
  • April 3, 2014 at 1:46 pm
    Original Bob says:
    I must have been asleep in insurance 101 when it was pointed out that claims are not paid by policyholder’s premiums. Oh wait I forgot that precedence was set and recently ... read more
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