Editorial – TWIA on rate hikes: No, but check back

Published 12:14 am Thursday, August 8, 2019

For now, that fierce seasonal storm that TWIA generates among its policyholders has subsided. For now.

The quasi-governmental entity, created almost a half-century back as a wind damage insurer of last resort, had sought a 10 percent increase in rates. This week, the Texas Windstorm Insurance Association’s board of directors rejected the increase, to the general relief of some 80 people at their meeting in Galveston and the 193,502 policyholders elsewhere in Texas whom they insure.

That includes 14 coastal Texas counties, including our own, where 25,544 people have TWIA protection.

But TWIA’s board may revisit the rate increase again — they can do that almost at will, at the next quarterly meeting in December or sooner, with notification. So if you’ve exhaled, breathe deep once more.

To their credit, the directors kept front of mind that coastal Texas continues to struggle in its recovery from Hurricane and Tropical Storm Harvey in 2017.

“The TWIA Board of Directors takes seriously the impact of rising insurance costs when considering TWIA rate changes,” John Polak, the association’s general manager, said in an issued statement Tuesday. “As coastal communities continue to recover from the effects of Hurricane Harvey, the board will continue to closely examine those concerns along with the importance of maintaining TWIA’s capacity to pay claims in the event of another storm like Harvey.”

So there’s the rub: TWIA seeks to protect those coastal Texans — include us among them — who stay imperiled by storms while protecting their own bottom line. If TWIA is not fiscally responsible, it won’t be able to help anyone.

TWIA’s not the only game in town, not anymore. Building standards have gotten more stringent, homes are built sturdier to withstand the storms, so private insurers have in recent years reclaimed some of the coverage areas they used to flee. But TWIA remains a very important player.

There are pockets where no one can afford insurance, such as on the Bolivar Peninsula, and Pat Avery, CEO of the Greater Port Arthur Chamber of Commerce, said some folks are simply rolling the dice when it comes to wind insurance.

Avery was in Galveston for TWIA’s directors’ meeting this week.

“From my understanding, TWIA has lost a significant number of participants,” she said, in part because of past rate increases. “A lot of people are doing without it.”

We’d recommend this before you do without: Ask your agent.

Stuart Salter of Julian Salter Co. in Port Arthur, an insurance and risk company, said there’s nothing he can do for you if you decide to forgo coverage. Too few people understand coverage, he said, and your insurance can guide you.

Rolling the dice is fun if you can afford to lose. Otherwise, your best bet is your agent.