Audit Says State Windstorm Insurance Program is Failing... Again
In 2008, after hurricanes Ike and Dolly ravaged the Texas coast and caused more than $30 billion in property damage, the state’s quasi-governmental windstorm insurance agency struggled to process the wave of claims that followed. The Texas Windstorm Insurance Association (TWIA) took more than 250 days, on average, to process more than 90,000 claims. Facing $2.5 billion in losses and thousands of lawsuits over how it handled claims, TWIA was essentially bankrupt.
The following year, in 2009, the Texas Legislature made significant changes to the program with the hope that it would be better prepared to handle the next big storm. Hurricane Harvey, which was strengthened by climate change and brought more than 75,000 claims as of July, was the overhaul’s first real test.
It failed.
A detailed and pointed staff report by the Sunset Advisory Commission, which audits state agencies to ensure they’re operating efficiently, found that in the aftermath of Hurricane Harvey, TWIA is “broke, in debt and facing a shrinking revenue pool.” Hurricane Harvey “revealed fundamental flaws in the design of TWIA’s funding structure and highlighted TWIA’s contradictory directives,” the report notes.
In 14 counties along the Texas Gulf Coast, TWIA is the insurer of last resort. It’s the only option for hundreds of thousands who private insurers won’t cover. Created in 1971 in the aftermath of Hurricane Celia, the number of policyholders relying on TWIA increased dramatically in the 2000s after a series of costly storms led to private insurers abandoning the coast.
Read more: https://www.texasobserver.org/audit-says-state-windstorm-insurance-program-is-failing-again/
