Higher Limits of Liability for 2020 Denied for TWIA

In mid-October, Texas Insurance Commissioner Kent Sullivan denied a request by the Texas Windstorm Insurance Association (TWIA) to raise its maximum liability limits for new and renewal policies with an effective date of Jan. 1, 2020, or later.

In August, TWIA submitted to the Texas Department of Insurance its proposal to adjust the maximum liability limits on properties it insures. The association’s board of directors is required by statute to propose adjustments to maximum liability limits annually.

The limits of liability apply to the maximum amount of coverage a policyholder can purchase from TWIA. The adjustments are supposed to track the BOECKH Index, which measures changes in construction costs.

At an Oct. 7 public hearing, TWIA spoke in support of the proposed adjustments and TDI staff testified they were not aware of any availability issues in the private market for coverage in excess of TWIAs maximum liability limits.

TWIA’s filing showed that residential dwelling risks, 121 contents risks, and 118 commercial risks are at the current maximum limit, according to TDI.

TDI reported that the adjustments to the maximum limits of liability requested by TWIA are as follows:

• An increase of 2 percent, from $1,773,000 to $1,809,000, for residential dwellings and individually owned townhouses and their contents.
• An increase of 1.9 percent, from $374,000 to $381,000, for the contents of apartments, condominiums, or townhouses.
• An increase of 2.1 percent, from $4,424,000 to $4,519,000, for commercial and governmental structures and their contents.

The cumulative adjustments to the maximum liability limits of TWIA’s policies since 1997 have significantly exceeded the increases in the weighted average BOECKH Index factors that measure changes in construction costs, according to TDI.