Hurricane Would Mean Coastal Residents Would Have To Pay More For Insurance on Homes, Cars and Farms

| May 24, 2014 | 0 Comments

Along with the devastating physical aftermath of the storm, Texas insurance officials have now added another hit for coastal residents – they are going after your pocketbook.

Despite strong protests from coastal residents and state legislators, the agency recently passed new rules that are really just a tax on those who live in 14 coastal counties. Under the new rules if a hurricane hits Texas, the Texas Department of Insurance will hit residents in 14 coastal counties with surcharges on insurance of all types include that on homes, autos farms and ranches.

The rules and the timing of the announcement are drawing sharp criticism from two Coastal legislators who represent areas that are among those that will be affected.

Not only were the new rules announced just one week before the June 1 start of the hurricane season, they were announced on a holiday weekend when criticism about the rules would be muted because families were leaving town and not paying close attention to the news.

Todd Hunter

Todd Hunter

“These rules are unfair to our 14 coastal counties,” said State Rep. Todd Hunter, R-Corpus Christi, and a one of the state’s experts on windstorm and insurance. “These rules amount to a tax only on coastal residents. It seems that the public comments made at the hearings held in Beaumont and Corpus Christi were ignored.”

Hunter said the Department of Insurance should have left the matter in the hands of the legislature and he promised to try to do something about the unfair surcharges.

“I will be coordinating with all coastal legislators to fight these rules. I will also make efforts to organize and unify all of our coastal communities regarding these unfair rules,” Hunter said.

Hunter wasn’t the only one who was angry about the rules.

 “I’m shocked and dismayed that after all the testimony they heard on the issue, ranging from geographical discrimination to racial discrimination to economic concerns, that they would institute or begin to institute these surcharges,” said State Rep. J.M. Lozano, a Kingsville Republican who represents San Patricio County in the coastal tier counties.

The rules apply to the Texas Windstorm Insurance Association which covers 14 counties along the coast of Texas as well as parts of Harris County. They will become effective June 12.

Julia Rathgeber

Julia Rathgeber

“The purpose of these rules is to implement the legislation that created an orderly process for issuing bonds and paying back those bonds,” Insurance Commissioner Julia Rathgeber said in a statement. “This process is critical after a storm or event. Lenders need the certainty that those rules will provide, and coastal residents need the certainty in the event of a storm, there will be adequate funds to pay insurance claims.”

Some worried that the state could implement the surcharges at any time although insurance officials say they will only go into effect after a massive hurricane that the state would have to have the funds to pay certain bonds.

Those bonds would only be used if the storm depletes other windstorm association funds.

There’s already a lawsuit underway to get the state to approve millions of dollars in assessments for insurance providers.

The association first pays for claims out of its premiums if there is a catastrophic storm.

The Department of Insurance had three public hearings: one in Beaumont, one in Austin, and one in Corpus Christi on the new rules. It received about 340 written and oral comments on the proposals.

Hunter said he planned to keep fighting the rules.

 “I am extremely disappointed with the Texas Department of Insurance,” Hunter said. “They again show that they are not coastal friendly. I plan to coordinate and communicate up and down the coast to do everything I can to create new laws that are helpful to the coastline, not punish the coast line.”


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Category: State Rep. J.M. Lozano, State Rep. Todd Hunter, Texas Windstorm, Texas Windstorm Insurance Association


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