Texas Gov. Rick Perry on Friday signed into law bills to restructure the state’s windstorm insurance fund, the only property insurer for homeowners and business in 14 coastal counties, and provide financial help to areas still struggling to recover from hurricanes in 2008.
At a bill-signing ceremony in Galveston, Perry said “the past year was especially difficult for this community.”
The Texas Windstorm Insurance Association was depleted after hurricanes Ike and Dolly lashed the coast last year. For thousands of coastal Texans, it became the only wind damage property insurer after private companies decided to pull out of the region following Hurricanes Katrina and Rita in 2005.
It has been funded by policy holders’ premium payments, assessments on insurance companies that do business in the state and reinsurance, a backup policy sold to insurance companies.
Perry’s office said the changes he signed into law will allow coverage of up to $2.5 billion in losses and ease funding method restrictions. The Texas Department of Insurance is required to develop incentives for insurers to voluntarily provide coverage on the coast. The agency will keep a list of those companies with the goal of helping consumers find other coverage and making TWIA an insurer of last resort.
The financial assistance Perry signed includes more than $425 million for disaster-related expenses, including $150 million for the University of Texas Medical Branch. Money for UTMB includes spending for repairing education, research, hospital and clinic space.
Perry also signed a bill that would allow $150 million in bonds to help UTMB build a new 200-bed hospital. That money will be matched by a $200 million contribution from the Sealy Smith Foundation.
UTMB suffered more than $1 billion in damage inflicted by Ike. Only about $100 million of that was covered by insurance. The damage prompted UTMB — Galveston County’s largest employer — to lay off about 3,000 employees.
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