Texas Windstorm Insurance Association approves price hike.
Homeowners and business owners in the coastal areas of the state will see an increase of 5 percent in their Texas insurance rates for their coverage against windstorms next year.
This announcement came following the approval from the board of directors at the Texas Windstorm Insurance Association. That same board has also postponed a decision regarding whether or not they will approve the enactment of another increase which would be determined by the distance from a property to the shoreline. That decision was delayed until a meeting in Galveston, which will take place on August 7, 2012.
The rate increase will apply to both residential and commercial property owners.
It applies to those who have Texas insurance coverage through the association, and the increased premiums will take effect as of January 1, 2013.
The Texas Windstorm Insurance Association is connected to the government and is the main insurer for residential and commercial property owners among the 14 counties along the coast as well as areas of Harris County.
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A number of the individuals and businesses in those areas are not capable of purchasing standard insurance, so it is required by the state that Texas insurance companies contribute to the agency. However, according to the association’s general manager, John Polak, “We need more rate than we’re getting today to pay projected future losses.” He also pointed out that there had previously been an increase of 5 percent from last year to this year.
John Hagins, a spokesperson for the Texas Department of Insurance, stated that as this particular rate hike is a part of the annual filing for the association, and it is not greater than 5 percent, it does not require the commissioner’s approval in order for it to go into effect, assuming that it has been properly filed.
The other potential rate increase which will be addressed during the August meeting, has been designed by a committee with the Texas Windstorm Insurance Association for a recommendation of a hike of 4.7 percent for homeowners and 1.7 percent for business property owners. Texas insurance policyholders nearest to the coast could therefore see an increase in their premiums by as much as 10 percent.