Rockport Pilot, Newspaper of Aransas County, Rockport, TX"Experts say Texas still unprepared for major hurricane
The Texas insurance industry has a worst case scenario for the 2006 hurricane season and it doesn't bode well for consumers or insurers. If a hurricane packing 140-mile an hour winds makes landfall at Galveston or the immediate area and proceeds inland striking parts of Houston and Harris County, insured losses will reach several billion dollars. The Texas Windstorm Insurance Association (TWIA) would go broke and there would be no funds left to pay for losses if a second or third storm hits the state.
TWIA provides $26 billion in windstorm coverage for residential and commercial property along the Texas coast. Forty-four percent or $10.3 billion of TWIA's insured property lies in Galveston County.
TWIA currently pays losses through a multi-leveled catastrophic funding mechanism which comes from insurance companies, reinsurers and TWIA's past premiums. This funding currently totals $1.3 billion. Any of TWIA's insured losses which exceed $1.3 billion will come directly from insurance companies who can recover these additional payments through tax credits which come from the state's general revenue fund. "
“Every Texan, not just those who choose to live along the Texas coast, will be affected by a major hurricane,” said James Langford, vice president of the Texas Farm Bureau Insurance Companies and a member of the TWIA board of directors. “If we don't do something to increase the capacity of TWIA, the state of Texas will have an economic catastrophe on its hands.”
The TWIA board of directors as well as a majority of insurers has proposed a series of bonds which could provide an economic defense to any catastrophic hurricane. Under the proposal, pre-event bonds would be paid by policy owners living along the Texas coast, while post-event bonds would be paid by policy owners throughout the state. Any bonding program would require legislative action. The bonds would be paid through minimum assessments only after a major hurricane strikes.
73 fer nw,
Bob AD5VJ(AAR6VM)
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