WINDSTORM RATES GUSTING UPWARD
AUSTIN (Houston Chronicle) – Insurance Commissioner Mike Geeslin has approved an 8.2 percent rate hike on residential policies for the more than 200,000 coastal residents insured by The Texas Windstorm Insurance Association (TWIA).
The rate increase, effective Feb. 1, will add $84 to the $1,023 average annual premium for homeowners in 14 coastal counties and a portion of Harris County, according to the Texas Department of Insurance.
A 5.4 percent increase for commercial policies will also take effect Feb. 1.
Geeslin also ordered 25 percent of premiums be placed in a catastrophe fund, the highest amount ever set aside to prepare for a major hurricane. The fund now contains about $385 million.
TWIA said it needs increased premiums to meet rapid growth related to a Gulf Coast building boom and fewer private insurers writing policies in hurricane-prone areas.
The insurer now covers 213,558 structures, including many school districts and higher education facilities. This year, it has added more than 69,000 structures. In the entire coverage area, potential liability — including business interruption and additional living expenses — totals $62.8 billion.
Last year, TWIA, which has $1.8 billion available to pay claims, paid $160 million for losses caused by 2005's Hurricane Rita.
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