The Texas Windstorm Insurance Association Board of Director’s voted to increase rates by 5% at the August 1, 2017 quarterly meeting. TWIA will file the proposed rate increase with the Texas Department of Insurance by August 15, 2017, as required by statute. The rate increase will go into effect January 1, 2018 and will apply to all TWIA residential and commercial policies. The Board’s analysis and deliberations that led to their decision to increase rates by 5% took into account the unanimous recommendation of the Actuarial and Underwriting Committee, input from a wide variety of stakeholders, and actuarial indications that rates are currently 30% inadequate.
Texas Insurance Code, Chapter 2210 requires that TWIA rates be reasonable, adequate, and not unfairly discriminatory. You can learn more about TWIA Rates on TWIA’s About Us page.
According to the TWIA website, the average premium on a TWIA residential policy is approximately $1,587. A 5% increase represents an actual dollar increase of around $79 per year.
Response from Wayne Faircloth
Texas Representative, District 23
On Tuesday the Texas Windstorm Insurance Association (TWIA) approved an increase in premium rates by 5 percent, despite great efforts otherwise from myself and other coastal legislators. See letter from coastal legislators, here.
The association’s board raised the rates stating that they are roughly 30 percent below what the association needs to adequately cover its risk. Even while the association has secured more than $4.9 billion in funding, which is enough to cover a 125-year storm.
It is disappointing that the TWIA board approved a rate hike on coastal residents and businesses since we are captive to their decisions. None the less, I am committed to finding creative ways to continue to incentivize private market insurers to write coastal risks.
The Commissioner of the Texas Department of Insurance shall approve or disapprove the filing in writing no later than October 15, 2017. If the filing is not approved or disapproved on or before that date, the filing is considered approved.
[8-4-2017]
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