Fearing coastal ‘economic chaos,’ Texas lawmaker files first of 3 windstorm insurance bills

via Dallas Business Journal

Sen. Larry Taylor, R-Friendswood, has filed the first of his three bills to address issues with the Texas Windstorm Insurance Association.

Taylor’s Senate Bill 498 extends TWIA’s waiver program, which would otherwise expire at the end of the year. Avoiding that lapse in windstorm coverage is important because many homeowners lose policies through no fault of their own, such as a carrier’s decision to stop writing in a particular market, Taylor has said.

Current law says TWIA is the insurer of last resort in 14 coastal counties. To qualify for a TWIA policy, a homeowner must provide proof he or she has been turned down for coverage in the private market. Then TWIA is expected to do its own inspection and paperwork before extending its coverage to the homeowner.

“The process for a homeowner to prove after the fact that their home meets eligibility standards is unnecessarily cost prohibitive in many cases,” says Taylor of his first TWIA bill filed this session. “Extending the waiver program is essential to maintaining economic stability on the coast.”

The key TWIA bill Taylor is still expected to file this session is to bid out the operations of TWIA to a potential private vendor. Taylor, a conferee on the bill that overhauled TWIA operations in special session in 2011, says he is still dissatisfied with the quasi-agency’s operations. The private market is more than qualified to take over many of the functions “that TWIA does so poorly,” Taylor said.

Coastal properties carry three forms of insurance: property, flood and windstorm. Law constrains TWIA as the market of last resort by requiring homeowners to prove the private market has turned them down. That might be an especially attractive premium drop for property owners directly on the coast, but most private insurers don’t bother to write policies in coastal areas such as Galveston County.

Some 40,000 homeowners participate in the waiver program until permanent policies can be written, Taylor said. To end the program “would result in economic chaos along the coast,” according to Taylor.

Taylor does not chair, or even sit on the Senate Committee on Natural Resources & Economic Development this session. Instead, Lt. Gov. Dan Patrick tapped Taylor to chair the Senate Committee on Education.