Top 10 South Central Insurance Journal Stories of 2021
Winter Storm Uri, Hurricane Ida and the fallouts from each storm dominated headlines in Insurance Journal’s South Central region in 2021. Readers were also interested in Texas’ crackdown of commercial vehicles, the Texas legislature’s passing of a commercial auto tort bill and the lawsuits involved with the Astroworld music festival tragedy.
Here’s a look back at the top 10 Insurance Journal South Central articles in 2021.
The top read story in Insurance Journal’s South Central section concerned Winter Storm Uri, which brought snow, ice and frigid temperatures to the Southern U.S. and particularly Texas in mid-February, leaving millions without power and causing several deaths.
Moody’s predicted insured losses for property and casualty insurers to total in the billions of dollars, while the Insurance Council of Texas said the storm “may be the costliest winter weather event in the state’s history.”
Moody’s said property damage both inside and outside of homes and commercial structures will result from snow and ice on the exterior of buildings, and “flooding and other water damage caused by frozen and broken pipes,” inside the impacted properties.
By March, catastrophe modelers and insurance industry market analysts estimated insured losses of in Texas between $10 billion and $20 billion.
Hurricane Ida caused damaged infrastructures and dangerous living conditions in Southeast Louisiana, leading Insurance Commissioner Jim Donelon to issue an emergency directive requiring insurers to pay policyholders’ evacuation expenses.
Donelon’s order came days after Ida made landfall as the second-most damaging hurricane to hit Louisiana, behind Katrina in 2005.
Donelon’s order was unpopular with some insurers, including State Farm, which Donelon name dropped in a Sept. 8 press conference.
“State Farm can’t ignore my order, no insurer can. But they can challenge it in court. … We expect that it will be challenged.”
The directive for insurers to provide coverage applied to policies in the 25 parishes listed in Emergency Rule 47, a measure issued by Donelon to protect policyholders from cancellations and non-renewals after Hurricane Ida. The 25 parishes were also listed in Gov. John Bel Edwards’ Hurricane Ida emergency declaration.
In July, Texas Gov. Greg Abbott signed four measures relating to the Texas Windstorm Insurance Association.
House Bill 769 prevents TWIA’s board of directors from voting on a rate increase if there is a vacancy on the board that has existed for 60 days or more. HB 769 also prohibits TWIA from purchasing reinsurance from a broker or insurance company involved in the execution of a catastrophe model the association uses to determine the probable maximum loss applicable for the period covered by the reinsurance.
Senate Bill 1448 requires that a vote by the board to raise TWIA premium rates must pass by at least a two-thirds majority.
House Bill 2920 allows for a grace period of 10 days for payment of premiums on insurance policies renewed by TWIA.
House Bill 3564 prohibits the Texas Department of Insurance from rescinding a certificate of compliance for a completed or ongoing improvement for purposes of coverage under a TWIA policy after a certificate has been issued.
Readers were interested in a story on Texas public safety officials’ inspection of more than 6,000 commercial motor vehicles that resulted in over 1,000 citations, more than 18,500 warnings and over 1,600 vehicles taken out of service for safety violations.
The Texas Department of Public Safety (DPS) inspected 6,288 commercial motor vehicles as part of International Roadcheck 2021 (May 4-6), a national inspection initiative that’s held annually and aimed at enhancing commercial motor vehicle safety.
The most common infractions included problems with brakes and defective tires. Other violations included failure to have the proper type of driver license for the vehicle being driven and violations of hours of service requirements.
This spring, the Texas legislature passed House Bill 19, a law that proponents say will help control abusive lawsuits against commercial motor vehicle operators following accidents.
The Senate passed the bill in May, followed by the House in June. The legislation went into effect on Sept. 9.
The bill was written in response to a spike in lawsuits arising out of commercial motor vehicle crashes, according to Rep. Jeff Leach.
Leach said the law would require a two-part trial in civil actions involving a commercial motor vehicle if requested in a motion by the defendant.
In the bifurcated trial system, the driver of the vehicle subject to the civil action must be found “negligent in operating an employer defendant’s commercial motor vehicle” before the lawsuit can proceed to the second phase, which involves a claim against the driver’s employer, according to a House summary of the bill.
The bill’s proponents included Texans for Lawsuit Reform, the Independent Insurance Agents of Texas, the Insurance Council of Texas, and the American Property Casualty Insurance Association.
The arrival of Tesla auto insurance into the Texas market proved to be a hit among our readers.
In late January, the state insurance department approved a revised policy form submitted by Redpoint County Mutual Insurance Co. for a Tesla Insurance Program for private passenger autos.
Tesla launched the program in October.
The program is underwritten by Redpoint and distributed through the Tesla Insurance Services of Texas Inc. (Tesla), an MGA formerly known as Samson General Agency.
Tesla Insurance on its website says its product is competitively priced and “designed to provide Tesla vehicle owners with up to 20% lower rates, and in some cases, as much as 30%.”
Physical damage, bodily injury and liability are among the basic coverages offered by Tesla Insurance. The company says it also offers “additional financial protection against theft of the car, and damage to the car for events other than traffic collisions.”
In addition to basic and other enhanced coverage offerings, an “Autonomous Vehicle Protection Package” is available. “This package includes Autonomous Vehicle Owner Liability, Wall Charger Coverage, Electronic Key Replacement, and covers Cyber Identity Fraud Expenses,” the Tesla Insurance website states.
In November, FedNat Insurance announced it pulling out of the Louisiana and Texas markets and doubling down on its home state of Florida after two years of heavy storm-related losses.
FedNat’s wholly-owned subsidiary, Maison Insurance Company, expects to begin non-renewing its Louisiana policies in January 2022 and its Texas policies in February 2022.
FedNat acquired Louisiana’s Maison in late 2019 with it more than 1,300 homeowners insurance operations, mostly in Louisiana and Texas.
FedNat had grown to be one of the largest homeowners insurance companies in Louisiana with more than $81 million in premiums between FedNat Insurance Company and Maison, according to the National Association of Insurance Commissioners.
However, FedNat suffered major losses when the region was battered by a series of storms including Winter Storm Uri and Hurricane Ida.
“The impact of these significant catastrophe weather events has put a strain on FedNat’s capital position and further action is now appropriate,” Michael H. Braun, FedNat’s Chief Executive Officer, said during a company earnings call.
The fallout from Hurricane Ida extended into the final months of the year as Louisiana insurers were assessed $100 million to cover the cost of two regional insurance companies facing insolvency due to losses from the storm.
The Louisiana Insurance Guaranty Association board voted in late November to assess admitted insurers 1% of 2020 net written premiums weeks after Insurance Commissioner Jim Donelon filed injunctions seeking a government takeover of Access Home Insurance Co. and State National Fire Insurance Co.
LIGA said insurers will be able to recuperate the assessments over 10 years in the form of tax credits.
“They don’t get the value of their interest income that they lost, but they do get their principal back,” said John Wells, executive director of LIGA.
The two carriers that went under account for 1% of Louisiana’s property insurance market.
Insurance Commissioner Jim Donelon recently announced SafePoint Insurance Co. will take over the 30,000 homeowners policies from the two insolvent insurers.
The Astroworld Festival crowd surge in November killed 10 people in one of the worst music festival crowd crushes in U.S. history.
More than 400 lawsuits have been filed in its aftermath, including a $2 billion lawsuit by Houston attorney Thomas J. Henry is on behalf of over 280 victims.
The lawsuit names Live Nation, Apple Music, performers Travis Scott and Aubrey Drake Graham, and NRG Stadium among the defendants.
Live Nation promoted the event, while Apple Music streamed the music festival live. Scott and Graham were performing on stage at the time of the crowd crush. The event was hosted at NRG Stadium in Houston.
“The defendants stood to make an exorbitant amount of money off of this event, and they still chose to cut corners, cut costs, and put attendees at risk,” said Henry. “My clients want to ensure the defendants are held responsible for their actions, and they want to send the message to all performers, event organizers, and promoters that what happened at Astroworld cannot happen again.”
In December, medical examiners with the Harris County Institute of Forensic Sciences in Houston announced that the 10 people died from compression asphyxia.
The House Oversight and Reform Committee recently announced it has launched an investigation into Live Nation.
A Texas jury awarded $352 million to the family of a former Houston airport worker who was paralyzed from the chest down after a van driver struck him on the tarmac.
The award, announced on Oct. 25 in the Harris County 127th District County, marks the largest jury verdict for actual damages for an injured worker in Texas history, according to Sorrels Law, the firm representing the family of the paralyzed worker.
Ulysses Cruz was on shift as a wing walker for United Airlines on the morning of Sept. 7, 2019, when he walked behind a United plane backing from the gate at Houston’s Bush Intercontinental Airport.
According to court records, Cruz was struck by an Allied Aviation van driven by Reginald Willis, causing Cruz to be throw the grown.
Cruz hit the tarmac and sustained serious injuries. He later underwent spine-stabilization surgery following the accident, leaving him paralyzed from the chest down.
The jury found Allied liable for 70% of the accident and Willis 30%.
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