Texas lawmakers will be convening in a special session of Senate after they were unable to determine the fate of the state’s Windstorm Insurance Association. The state-run insurance program provides coverage to homeowners in coastal areas that are prone to hurricanes. A bill to reform the program was before the state Senate last months, but legislators were unable to reach a compromise regarding the provisions of the bill. Now, the Legislature will be in session until a verdict can be reached.
One of the provisions of the bill to reform the Windstorm Insurance Association would allow policyholders to be awarded punitive damages if their claims are denied and they win the subsequent challenge.
The special session affords legislators time to introduce new provisions to the bill. Representative John Smithee is doing just that. He is proposing an amendment to the original bill that would put strict limitations on lawsuits filed against the organization, a move he believes will save it a significant amount of money. The bill has the support of Governor Rick Perry, who has long held that the insurance program should be protected from frivolous lawsuits.
Those insured through the program will still be able to file lawsuits against the organization, but, if they are successful, they will only be privy to the maximum value of their policy. They will have no way to seek punitive damages thereafter.
