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Legislature must make windstorm a priority

October 10, 2018

State officials in Austin should take note of that high-pressure system headed their way from the Gulf Coast. It’s not a tropical storm, but the pleas from millions of coastal residents to finally do something about rising windstorm insurance rates.

The Texas Windstorm Insurance Association, the so-called insurer of last resort for coastal Texans, is proposing a whopping 10 percent increase in these rates for residential and commercial properties. This is after rate increases of 5 percent every year from 2011 to 2018, with the exception of 2017, when rates stayed the same. Keep in mind that Southeast Texas suffered no major hurricanes after Ike in 2008 until Harvey last year (with flooding instead of wind damage), a nine-year span of good fortune. It looks like we’ll get through this year without one, either.

State Insurance Commissioner Kent Sullivan could approve or deny this latest rate increase by Oct. 15, to take effect on Jan. 1, 2019. It’s time to just say no.

The state Department of Insurance and the Legislature need to do more to encourage — or require — private insurance companies to offer more windstorm coverage. Some of them do, and more private policies have been available in recent years. That progress is welcome, but it’s not enough.

The major insurance companies serving Texas offer various types of coverage to their customers — home, life, auto, etc. If they have a loss in one sector in one year, it’s invariably made up for with profits (and often healthy profits) in other sectors.

If more private windstorm policies were available to coastal Texans, fewer property owners would be forced to turn to the Windstorm Association. Until that happens, the state agency gets too many of the higher risk properties with the potential for losses, keeping it on a cycle of damage payouts and rate increases.

This is not a new issue in Texas. Unfortunately, it has not been a priority in the Legislature in recent years. That needs to change when the opening gavel bangs down in January for the new five-month session.

Coastal lawmakers like state Rep. Dade Phelan, state Rep. Joe Deshotel and state Sen. Brandon Creighton need to remind their colleagues that coastal counties contribute more than their share to the state’s economy. Yet windstorm insurance costs have forced some residents and business owners to leave the coast, and yearly rate increases accelerate that process.

Coastal residents are not asking for a handout, just more fairness. Insurance is the concept of shared risk. Right now, coastal counties bear virtually all of the burden for windstorm coverage when that could be spread through a larger pool of insurance customers. Again, state officials can take steps to make that happen, or they can continue to let insurance companies cherry-pick their clients. The best option there is obvious.

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