Commissioner Denies Texas Windstorm Insurance Association Request to Raise Liability Limits

November 6, 2017 by

Texas Insurance Commissioner Kent Sullivan in mid-October declined to approve a request by the Texas Windstorm Insurance Association to raise the maximum limits of liability on windstorm and hail policies.

TWIA filed a request in August to increase the limits for residential dwelling and individually owned townhouses and associated contents; contents of apartments, condominiums or townhouses; commercial structures and associated contents; and governmental structures and associated contents.

The proposed changes would have raised limits on dwellings by 0.9 percent from $1.77 million to $1.79 million; contents of apartments, condominiums or townhouses by 1.7 percent from $374,000 to $380,000; and commercial structures by 1.1 percent from $4.42 to $4.47 million. The adjustments would have taken place on policies written or renewed on or after Jan. 1, 2018, and were based on the BOECKH Index as required by the state insurance code.

A hearing was held on the proposed change in maximum limits on Sept. 25; the order denying the change was issued on Oct. 16.

At its August 1 quarterly meeting, TWIA’s board of director also voted to increase rates by 5 percent. The rate increase becomes effective Jan. 1, 2018, and will apply to all TWIA residential and commercial policies. In its order denying TWIA’s request to raise maximum limits of liability, TDI said the decision does not affect TWIA’s rates.

On Oct. 12, TWIA reported that its expected ultimate loss and loss adjustment expenses from Hurricane Harvey will be around $1.13 billion. At that time, TWIA had received 69,833 claims, including commercial, residential and manufactured housing. It had closed more than 50 percent of the claims received — 36,894 — and had paid approximately $460 million in claim payments, including closed and open claims, as of that date.

The Insurance Council of Texas has pegged total insured losses from Hurricane Harvey at $19 billion, a number that includes an estimated $11 billion in flood losses insured by the National Flood Insurance Program.

Appraisal Window Extended

The time period during which TWIA policyholders affected by Hurricane Harvey may request an appraisal after receiving a claim disposition letter from the association has been extended. The claim disposition letter outlines the amount the insurer will pay for losses covered by their policy.

Policyholders who want to dispute their claim payment amount are urged to first contact TWIA so the company may attempt to: address any unmet needs; provide a timely resolution; and prevent any out-of-pocket or additional costs associated with a formal claim dispute process.

Under normal circumstances, policyholders have 60 days from the date they receive their claim disposition letter to request an appraisal. However, TWIA recommended more time be granted to policyholders and the Texas Department of Insurance extended the deadline to 120 days for claims arising from Hurricane Harvey.