Fed up with the inability of Texas to reform its insurance company of last resort, policyholders have left the insurer en masse to create a new, mutually owned company to cover damage to properties along the Texas Gulf Coast.
Led by state lawmakers, former policyholders of the Texas Windstorm Insurance Association have formed the Windstorm/Hurricane Insurance Plan in Texas (WHIPIT). Most TWIA insureds canceled their policies, with many saying they wanted to WHIPIT good.
TWIA top administrators are crying “foul,” saying that there’s not enough money in the company’s coffers to return all of the former policyholders’ premiums, most of which went to fight claims following Hurricane Ike.
Insurance companies complain that the new entity’s rates are too low and that there’s no way the private market can compete. WHIPIT managers say they have not taken any public money and that they are able to keep premium rates low by maintaining “reasonable” salaries for company executives.
Gov. Nick Perry made his position clear on this latest development. “Whatever,” Perry said in a statement from by his office.
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