PAnews.com, Port Arthur, Texas

Local News

February 24, 2014

Windstorm insurance changes topic of Wednesday public hearing

PORT ARTHUR — Five years after Southeast Texas was savaged by high winds associated with Hurricane Ike, the devastating hurricane may keep on costing those who live along coastal areas.

The cash-strapped Texas Windstorm Insurance Association is looking at ways to generate more revenue to fund reserves for future claims, and is looking closely at 14 Gulf Coast states as a possible source.

Part of that funding mechanism proposed by the Texas Insurance Agency could include surcharges placed on the 14 counties, including Jefferson County, Stuart Salter of Salter Insurance in Port Arthur.

Those surcharges — as much as 20 percent — would hit all of the 14 coastal counties hard.

The Texas Department of Insurance has scheduled a public hearing at 9 a.m. Wednesday at the Beaumont Civic Center to hear the concerns of those that would be affected.

“It will hit us in so many ways —automobile dealers, municipalities, homeowners, just about anyone that has property that could be damaged by windstorms,” Salter said.

Insured losses from Hurricane Ike alone cost $12 billion, and the earlier Hurricane Rita, in 2005, costs $2.8 billion.

Because of those claims, the state is looking to the coastal counties to shoulder the cost of shoring up its reserves.

Singling out the coastal communities is not fair, Salter said.

The problem is that hurricanes are not the only type storm that strikes the Lone Star State.

Data from the Insurance Council of Texas website indicates that of the top 23 costliest Texas storms dating back to 1970, 14 were tornados, hail storms and even the Bastrop Wild Fire, and one claim event resulting from Southeast Texas flooding not associated with a hurricane.

Cost of those storms range from the most expensive — a 1995 hail storm in North Texas costing $1.1 billion in claims, to the least expensive, a 2004 hail storm costing $175 million in Amarillo.

“They are putting it all on us. They did not make Dallas pay for windstorm from tornadoes, the state took care of that. When the drought is going on in Central Texas, it came out of state coffers,” Salter said. “It is a statewide issue, so there needs to be a statewide solution.”

Salter said he hopes to get some answers at Wednesday’s public hearing.

First, he’d like to know if the 14 counties will be assessed surcharges, how much they will be, and how long they will be in force.

“I  have to believe this (proposal) has not been fully vetted, and am hoping our legislators will rethink this,” Salter said. “I think the solution is just to not make it a coastal issue.

State Representative Joe Deshotel, D-Beaumont, will be in attendance Wednesday as well.

Deshotel said he asked that a public hearing in Southeast Texas be added to the two already planned by the Texas Department of Insurance.

“There was one scheduled for March 4 in Austin, and one in Corpus on March 6. We said we deserve a hearing here. That is too far for our citizens to drive, and this issue is too important,” Deshotel said.

Insurance costs should be spread out across the state, not just those Gulf Coast counties, Deshotel said.

In addition to the added cost, Deshotel said, the financial impact on coastal communities should be looked at before a decision is made.

“Our industry here drives the economy, so we should not be singled out,” Deshotel said.

The Greater Port Arthur Chamber of Commerce,  a member of the Coastal Windstorm Task Force, issued a statement declaring the Task Force’s opposition to the proposed changes by the Texas Insurance Agency.

“The Port Arthur Chamber of Commerce urges every property owner on the Gulf Coast to attend this meeting and express your opposition and opinions,” Bill McCoy, Port Arthur Chamber of Commerce president, said.

E-mail: skoonce@panews.com

Twitter: skooncePANews



 

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