Will Texas Find the Necessary Solutions to Keep TWIA Solvent?

The Texas Windstorm Insurance Association (TWIA) — backed by public and private funding — provides Texas' coastal residents and businesses with wind and hail coverage when it is not available in the private marketplace. Its funding is critical to the statewide homeowners’ insurance marketplace. Without adequate stability, a major weather event on the coast could mean the state budget and Texas policyholders may cover costs that TWIA cannot .

Recent News Articles

Texas Windstorm Pool Seeks to Increase Reinsurance Level for 2008

Insurance Journal

April 17, 2008

Citing increased exposure along the Texas coast, the Texas Windstorm Insurance Association has requested Commissioner of Insurance Mike Geeslin to authorize the purchase of $1.5 billion in reinsurance for the windstorm pool for the 2008 hurricane season. The request represents a half-billion dollars more than the $1 billion TWIA bought for the 2007 hurricane season.

TWIA is the state-backed "insurer of last resort" for wind and hail for 14 counties along Texas' Gulf Coast and for parts of Harris County. Read more.

More TWIA articles.

Report: The Texas Windstorm Insurance Association: Challenges and Solutions

The Texas Windstorm Insurance Association is seeking solutions to pay losses and avoid compromising the Texas General Revenue fund in the event a major hurricane makes landfall in Galveston or Corpus Christi. Last year TWIA paid $160 million in losses as a result of losses caused by Hurricane Rita and that would be a drop in the bucket had the storm have hit Galveston.

The number of structures insured by TWIA is growing dramatically. In 2001 the association had 68,756 policyholders. As of July 31, 2007 this insurer of last resort had 190,468 in 14 coastal counties and a portion of Harris County. This represents an increase of 116,653 policies since 2001 and an increase of 46,469 policies since January 1, 2007.

In 1992 TWIA had about $5 billion exposure in these counties. At the end of July 2007 their exposure was approximately $51.5 billion not including loss of business coverage and additional living expense coverage. This is a $13.2 billion increase since January 1, 2007.

When business interruption and additional living expense coverages are included the total TWIA exposure rises to over $56.1 billion. Building and contents exposure in Galveston county alone is currently $16.7 billion, an increase of $2.4 billion since January 1, 2007.

TWIA has $1.04 billion in funding, but when compared against a hurricane or multiple hurricanes with the potential of causing $4-5 billion or more in losses along the Texas coast, something has to change.

This would result in a shortfall which would have to be made up by the State of Texas. Read more...

August 7, 2007
Source: Southwestern Insurance Information Service

TWIA Terms and Definitions

Use this link to read a list of terms with definitions that will help with understanding the debate regarding the Texas Windstorm Insurance Association.