Texas Windstorm Insurance Association: 10% rate hike

HOUSTON – The Houston Chronicle reports that the Texas Windstorm Insurance Association, the state-operated insurer of last resort for many property owners along the Gulf Coast, is contemplating a rate increase as the risks from extreme weather events grow. TWIA’s actuarial and underwriting committee voted Monday to recommend that the association’s board of directors approve a filing to increase rates by 10% for 2025 residential and commercial policies. The association’s average residential premium stood at $2,300 as of June 30, TWIA spokesman Aaron L. Taylor said in an email. TWIA’s board will vote on the recommendation when it meets Aug. 6 in Galveston. The committee made its recommendation after reviewing TWIA’s 2024 Rate Adequacy Analysis, which found that current rates are inadequate by 38% for residential coverage and 45% for commercial coverage.

The request comes as Houston recovers from Hurricane Beryl and as a number of insurance companies are pulling back in Texas, particularly in coastal areas. Farmers Insurance, for example, sent a number of policyholders in Harris County nonrenewal notices this year after “initiating targeted underwriting actions designed to mitigate our risk exposure in the state,” a spokesman for the company told the Chronicle last month. Others have raised rates dramatically as extreme weather events, in conjunction with inflation, have resulted in a large number of costly claims. Over the course of 2023, according to a January analysis from S&P Global, average homeowners insurance premiums rose by at least 10% in 25 states, and Texas led the pack, with an effective rate increase of 23.3%. The situation has spurred homeowners to turn to TWIA and the Texas Fair Plan Association, which TWIA administers. TWIA, a not-for-profit insurance association, provides residential and commercial policies covering wind and hail damage to home and business owners in Texas’ 14 coastal counties, as well as the portion of Harris County east of Texas 146. As of March, there were about 250,000 TWIA policies in force in coastal Texas, a 37% increase from 2020, about half of those in Galveston and Brazoria counties.