Texas Regulators Urge Flexibility in Claim/Dispute Deadlines for Windstorm Insurer

The Texas Department of Insurance in its 2018 Biennial Report to the legislature has recommended amending state law to permit more flexibility in time limits for handling and resolving claims and disputes brought to the Texas Windstorm Insurance Association (TWIA).

Flexible deadline extensions would increase consumer protections and help ensure that consumers, as well as the association, have enough time to resolve claims and disputes, the department said.

TWIA is the insurer of last resort for wind and hail for counties along the state’s Gulf Coast. While it was created by the legislature, the association is not a state agency. However, it is subject to legislative adjustments and TDI oversight.

Currently under state law, the insurance commissioner can “extend certain deadlines for TWIA and TWIA consumers for good cause,” TDI stated in its Biennial Report. However, there is a per calendar year 120-day maximum limit for an extension on a claim or dispute.

For instance, according to TDI, if TWIA is allowed 30 additional days to accept or deny claims after a catastrophe, the consumer deadline to demand appraisal can only be extended by 90 days. Both extensions must occur during the same calendar year.

The insurance department pointed out that when the state experiences more than one catastrophic coastal event in one calendar year, such as Hurricanes Dolly and Ike in 2008, under current state law it’s possible that deadlines could only be extended after the first storm but not the second.

Therefore, TDI is recommending that lawmakers amend the statute to allow for applying claim and dispute deadlines to each event and not limit them to a calendar year.

The regular session of the Texas 86th Legislature convened on Jan. 8.