Texas homeowners insurance continues to be faced with serious problems
The Texas Windstorm Insurance Association (TWIA) has been facing significant financial troubles in recent years. Like other state-run insurance organizations, TWIA offers homeowners insurance coverage that is typically less expensive than coverage offered by private insurance companies. For smaller states that are not exposed to the same natural disasters that Texas is, these public organizations face only modest challenges. TWIA, however, has long been faced with the financial woes that are associated with homeowners insurance for coastal properties.
TWIA combats persisting financial issues
Texas is not necessarily known as a target for hurricanes in the same way that Florida is. The state does, however, experiences powerful winds that can cause significant damage to properties along the coast. These strong winds are typically associated with tropical storms and other disasters coming from the Gulf of Mexico. Because of the risks that these winds represent, many private insurance companies are unwilling to offer coverage in coastal regions of the state. TWIA offers homeowners insurance coverage to those that cannot receive it from a private insurer.
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Consumers becoming disillusioned with TWIA
More than 266,000 properties are covered by TWIA and the organization financial troubles are beginning to sow discord among policyholders. The impact of recent natural disasters has put heavy strain on the insurance program, which relies heavily on capital provided by private insurance companies. In some cases, the financial status of TWIA has been so dire that homeowners insurance claims payments had to be delayed, causing some strife between the organization and its policyholders. Adding to the problems faced by the program are several management scandals that have begun to threaten the legitimacy of the organization.
Legislature to determine future of homeowners insurance group this week
This week, Texas lawmakers are expected to meet with the governing board of TWIA. During the meeting lawmakers will work to determine the future of the organization, as well as the board that is currently running it. The Texas Legislature attempted to overhaul the ailing homeowners insurance group in 2011, but these efforts have not been able to overcome the problems that are crippling TWIA.