Homeowners insurance in Texas is getting more complicated

Texas Homeowners Insurance

Lawmakers have exited a hearing regarding the Texas Windstorm Insurance Association with new insight

Texas lawmakers have learned more about the current problems facing the Texas Windstorm Insurance Association (TWIA). The organization is often the last place where people can find homeowners insurance that provides coverage for certain natural disasters in the state. Like other state-backed insurance organizations, TWIA has had to deal with severe financial issues that have threatened its ability to effectively provide coverage to policyholders. Some of these issues have been resolved in recent years, but state lawmakers still have concerns.

Lawmakers express concern over the insurance organization’s over reliance on debt for funding

During a hearing, the Texas Department of Insurance noted that TWIA has received some $500 million in bonds ahead of a natural disaster. These bonds may help the insurer manage the costs associated with natural disasters, such as windstorms, in the future. For some lawmakers, this is a problematic issue, as they see the insurer as being over reliant on debt for funding. Though Texas has not experienced a major hurricane this year, TWIA’s financial situation is still a cause for worry for some lawmakers.

Ending TWIA may be a reasonable solution to the state’s liability issues

Texas Homeowners InsuranceLieutenant Governor David Dewhurst has suggested that TWIA should be put to rest. According to Dewhurst, the state’s insurer faces some $77 billion in liability and is seeing stronger competition coming from the private sector. Many private insurers are beginning to offer homeowners insurance policies that can rival those offered by TWIA in terms of coverage and benefits. TWIA remains one of the least expensive options in the insurance market, but this may not always be the case.

Getting private insurers more involved may be a better alternative to ending TWIA outright

Other lawmakers believe that ending TWIA would be a mistake. Instead, the state may be looking for ways to get private companies more involved in the natural disaster market. Depopulating TWIA of policies could also help the organization’s financial issues, allowing private companies to share some of the burden that these policies represent.

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