GALVESTON
State Sen. Mayes Middleton on March 10 introduced a bill that would abolish the Texas Windstorm Insurance Association and force private-market property insurers to offer such coverage to consumers at no increased cost.
Senate Bill 2556, which would affect more than 70,000 policyholders in the Galveston County area, had no co-sponsors Friday and hadn’t moved past the filing phase.
Middleton failed to respond to calls seeking comment Friday at 9:47 a.m., 10:46 a.m., 2:42 p.m. and 4:09 p.m., as well as an email sent at 9:31 a.m.
Industry insiders who typically comment about the association also were mute about the bill Friday.
As a condition of doing business in Texas, each insurer must include coverage for windstorm and hail in each policy written in a 14-county swath of land adjacent to the Gulf of Mexico, according to the bill’s text.
“Coverage provided must be provided at no additional cost to the insured,” according to the bill. “Costs incurred by insurers under this section shall not be recouped through a premium surcharge.”
The state Legislature established the association in 1971 to provide windstorm insurance on the Texas coast when no one else would, David Durden, general manager of the association, said Friday.
“TWIA serves to implement the Texas Legislature’s determination of the best structure to ensure a functioning property insurance market in Texas,” he said.
“Whether TWIA or the private insurance market provides it, coastal property owners must have access to insurance coverage for catastrophic hurricanes. Without it, people will be unable to live, work, and do business in our coastal communities, with economic effects throughout the state. The Association is committed to working with lawmakers as they consider how to best protect Texans on the coast.”
Middleton’s bill would abolish the association on Sept. 1, 2024, according to the bill.
That would affect 70,774 policyholders in Galveston County covered by 2,242 commercial policies, 236 manufactured home policies and 68,296 residential policies, said Aaron Taylor, senior legislative and external affairs specialist at the association. The association has 222,480 total policies for its coverage area, he said
This act would take effect immediately if it receives a vote of two-thirds of all the members elected to each chamber.
In 2018, the association was out of money and in debt, facing a shrinking revenue pool, according to the Texas Sunset Advisory Commission report.
Most private insurers left the windstorm market on the upper Texas coast long ago. In 2017, the windstorm association had about 240,000 policies covering more than $60 billion in property value, which includes residential, commercial and government-owned properties.
The association is funded by the premiums it collects from policyholders.
After Hurricane Harvey passed over the Texas coast in August 2017, the association’s reserve took a massive hit. More than 76,000 policyholders made claims after the storm, to which the association paid $1.7 billion. The association had to use $743 million of its $750 million reserve for catastrophes to pay off the claims, officials said.
The association in 2018 attempted to raise its premiums by 10 percent for both commercial and residential policyholders. Texas Gov. Greg Abbott in October blocked that attempt and said legislators should be allowed to try to reform the association before rate went up again.
The association voted to rescind that rate-increase proposal in 2019.
In August 2022, the association voted against another rate increase for policyholders.
The decision came after members of the public and local and state representatives asked the board not to raise rates, citing skyrocketing living costs for coastal communities and concerns about affordability.
(46) comments
This guy is something else, something else. Maybe he can get State Farm to come back and reinstate my insurance as well. He know he has lost the faith of the public with his Open Beaches blunder so now this. Give them some warm fuzzies with a bill that even gave the insurance lobby a chuckle. This has absolutely no chance at passing, he just wants the people to know he is there for them. Of course he didn't return any phone calls because this needs no explanation and he knows it. Maybe Mr. Zehler can answer a phone call or text, but I doubt he can support this whopper without being excused for laughing. Mayes Middleton has gotten my last vote, I don't need to be placated with feel good nonsense.
I hope someone Primaries Mayes Middleton for his Senate seat, I’ll vote Democrat before ever voting for him again
Middleton had no Democrat challenger in the 2022 General Election. In the March primary he, Bob Mitchell, Robin Armstrong and Bianca Gracia were on the Republican Primary ballot. I voted for Dr. Robin Armstrong who is now a County Commissioner.
The American Dream is to own your own business. Why would dictator Myles Middleton force private sector businesses to do something they don't want to? And what makes him think all TWIA policy holders want to switch insurance providers?
Hold on, so Mayes Middleton wants to abolish Tx. Wind Strom and the insurers in Texas pick it up yet, they are not allowed to increase MY current insurance premiums and pass it on to me? Sounds pretty good to me anytime, I can have my insurance premiums go down and not lose coverage. If this is correct I am for it. I like saving money as a Texan.
Dr. Joe
The other issues with the bill notwithstanding, why would you force this change on Sept 1, right at the peak of hurricane season?
Because your homeowners's coverage would have to take it over on Sept.1st with the same coverage and costs. My only question is why this story is today instead of April 1st.
“Coverage provided must be provided at no additional cost to the insured,” according to the bill. “Costs incurred by insurers under this section shall not be recouped through a premium surcharge.”
He obviously doesn't understand how insurance works.
I am crestfallen at the idea that this rich white supremacist traitor Republican. Would abandon Texas residents with his incongruous actions in order to aggrandize the insurance companies. This just goes to show that Texas home owners will continue to be headed to financial difficulties as long as they have the wrong legislators in power.
George your so mad that you made 2 sentences out of 1. You could have just posted your last sentence and made absolute sense for once. Instead you just continue to show there is a guy living rent free in your head. It's Saturday, go enjoy some fresh air.
Rusty, I agree. I rarely get past the first sentence of George’s posts.
😆 Hahaha!
Before you correct anyone else, you should make sure your post is correct. It should read, “George, you’re so mad….” You left out a comma, and you used the wrong “your.” Next time, you could comment on the issue and not on the one posting about it.
I suggest that perhaps there need to be tweaks in the proposal, but something has to be done. I note constant partisan comments about proposals that need to be looked into. Forcing the coastal swath of our state to self-insure has resulted in crazy rates. Insurance is designed to spread risk and cost across a larger area than 14 counties. Same with Fed flood. We were quoted a $2600 Zone X flood policy (not in 100/500 yr.. 2 years ago would be $600 and a $3500 windstorm policy on a $250k house this week. Can’t wait to get the home policy quote …. THAT is pretty much unaffordable for a young buyer that can only afford a home in that price range. I’m sure even the wealthy buyers on Galveston west end blink at rates. Has a lot to do with the island is turning into a 100% rental market.
Why should young families in the Panhandle be required to sub side our windstorm coverage. For most of us, living on the coast is a choice; the cost of windstorm insurance makes the consequences of that choice transparent.
I have always wondered why we have windstorm and the rest of Texas doesn't have to have tornado insurance. My barn was hit by a very strong wind or twister in February, took the roof off except for 1 piece of tin. It was considered windstorm and not covered under my homeowner's policy. I wish they would call it Hurricane coverage and it would comply with the dates of Hurricane season.
Rusty, that's a fair point. From a risk standpoint, tornados are much less common and the damage is over a smaller area, although it can be quite severe within the damaged area. If a separate tornado policy was required then I expect the premiums to be much lower than our windstorm premiums.
Well, maybe they shouldn't, but if Galveston wants to be the vacation destination of the south, folks need affordable housing to support it (and not just low income apartments on Broadway). Housing on the Island is already at all time highs and adding the required insurances makes it unaffordable for most. We already have a problem and getting rid of TWIA will eventually force us into market rates. You can't freeze the rates and expect full coverage/payouts. Another solution needs to be found as several posters have discussed.
Gary, after Harvey I took a look at damage in the various TWIA-insured regions. See all those years when we DON'T have catastrophic hurricane damage? Guess what...there are all types of weather related damage in other parts of the state that we DO get to help pay for.
It gets better. A good bit of premium dollars goes into backstopping hail damage. I did some research and going back to the 1950s, Galveston County had less than $2M in all hail related claims at that time. Once again, WE get to pay for North Texas hail damage year after year but you never hear much over the racket about hurricanes.
"Don't cry for thee, Abeline-ah."
Wayne… thanks for that bit info. Since people don’t need a special windstorm policy for hailstorm coverage, is the upshot that, in total, one part of the state subsidizes another and that overall things are more or less fair?
Gary, there are private insurers in Florida that are offering à la carte coverage. I would certainly remove hail insurance from our TWIA bill if I could do that. The problem right now is that they are smaller insurers, and they have not had time to show they can survive major events with the underwriting they have. But it is something to keep an eye on down the road.
Sub side = subsidize… oops
I have often thought a national insurance plan for natural catastrophes would be a better option that private plans that could be wiped out by a single event- like Ike or Harvey. Today there are weather-related crises impacting most of the country. (Everything, everywhere, all at once.) Whether all the claims can be fairly met seems like a crap shoot. I don't expect any plan to be flawless, but I know there are knowledgeable, competent people who could come up with something that works better for all of us instead of just the same few of us.
Sarcasm is an art form. It ought to be clever, not used to be mean.[wink]
North Texas should be included in paying for windstorm insurance due to all of the tornados that occur in this region of the state. Do this and maybe our rates will lower by spreading the cost to all who actually need windstorm.
I don't know all the important details about private vs government insurance, and details matter, but this sure seems like another politician representing his own or his lobbyist's interests rather than his constituents.
No, this is Mays Middleton attempt to distract from his selling out the public when it comes to adhering to the Texas Law of Open Beaches. His kiss up to major Donors Bill to over turn the Open Beaches Act was garnering too much attention.
It makes sense to me that if you want to be an insurance company in Texas that you must offer insurance to all Texans. Scraping off the cream and leaving the losses for the coasties shouldn't be the norm. There have been years when windstorm beyond the coast has had more losses than the coast has.
I have to assume that Mayes Middleton has researched this. Before I beat up on him, I want to hear more about it. Curtis Brown make a good point. My understanding is that Texas Windstorm is state created insurance for a small area and it is expensive.
Please elect people who have at least some idea of their responsibilities to their constituents. David Mayes was given a small oil company by his father and Robert Francis's mother gave him a small shopping center. Neither are businessmen or politicians. NFIP updated their rate setting policies and are saving money for approximately 23% of their policies. TWIA should update their policies to make rates balanced across the state. Middleton's plan makes as little sense as his Open Beaches bill. Carrie Wortham
Well Mayes Middleton is just making all kinds of self serving legislation up in Austin, isn’t he? First he wants to basically privatize our open beaches where he owns property and then he wants to do away with TWIA at no extra cost so he doesn’t have to pay for windstorm either. Nice if you can get it. He thinks Texans are dumb enough to fall for his rhetoric in his latest bill to take away the public’s right to access to the beaches and now he thinks he can force private businesses to pay for windstorm coverage for Texans without premium increases. I think the private insurance companies will be running as fast as they can to leave the Texas market altogether leaving us without any coverage. He is just looking for some kind of brownie points to pretend he gives a rat’s behind about his constituents.
Insurance on something that is large in participants and simple in determination is an ease for actuarial/rate computation. But even these simple actuarial computation must be repeated per any drastic event.
Is insurance a for profit private industry and should government regulate it? Well Texas says yes but, etc. ........ The federal and state government want to be benevolent/involved if there is an "disaster" declaration.
Texas yes but...... is a Texas insurance commission's problem to solve. And the commission creates actuarial problem's when the whole is split into segments, and must incorporate unpredictable but certain eventual incidents (hurricanes, floods, etc.).
Insurance in genera is a bucket of money that is reserved and replenished as needed. That means excess rates that build funding till the eventual happens and the reserve is used, and then there is a reset and of the rates. This is the cycle for a "stable" universal insurance program.
When the whole doesn't comply and the population wants consideration of the eventual disaster of one segment to be the only ones directly effected to bear the cost, is what is being discussed here.
Texas citizens eventually fund it. Whether it is by the rates paid to the for profit insurance or from the public coffers of taxes the result is, those disaster areas are given relief. The level of relief will vary depending on the individuals foresight to insure.
Case in point - low income housing in Galveston which was destroyed by Carla has been replaced with some very attractive housing at the old Oleander site and more in a very desirable location downtown. These are funded at tax payers expense and also have subsidized occupants at tax payers expense.
Pushing legislation to give and get better rates and or apply the higher rates by segments seems fairest. So if you choose a location with the exposure then you should prepared for higher rate and to squabble with the insurer or in court.
Middleton's activism, and intent are reaping the reward of public recrimination. Thus is the just desert of any politician.
Government meddling in the for profit sectors is very expensive and a source of pain to the public in general. I.e. flush the toilet and the GPM reducers in faucets caused double flushing and twice as long to get a glass of water. Really no improvement.
I've exhausted the GDN's tolerance so I leave the rest of the story to these commenters to supply.
After each hurricane season, a handful of insurers go into receivership. Finding companies willing to insure homes in Galveston is already an issue, and I’m not talking windstorm. The Texas windstorm insurance is a subsidy to the coastal communities, deemed necessary for the State’s economy, and a massive liability to the State’s finances. Removing the coverage under this bill will result in insurers leaving the State and create a property value crisis on the coast. Once subsidies become established as a right, there’s no easy way out.
After reading most negative comments in relationship to Mr. Middleton's proposal, I have decided that the problem is NOT the bill, but the failure of people to Understand how government works, many times.
Instead of making yourselves look foolish, I suggest contacting Mr. Middleton's office directly. WHAT??? They did not respond to your initial calls on Friday...did you leave a message? Our Representatives and Senators do not necessarily have control over their office hours while they are in session.
Hey, Carol!
In preparing this story, I called and spoke to a representative of Mr. Middleton four times on Friday, March 17. I was assured each time that Middleton’s office manager, Andrew Herrell, would get a response to me from Middleton.
We are now three days past the time he said comments would come, and The Daily News still has no word from Middleton’s office.
Thanks for reading The Daily News!
– B. Scott McLendon
Oops. Mayes not MKayes!
Do you really think this Middleton character is going to tell you the truth? He like other greedy legislators are lining their pockets. Make hay while the sun shines!
I think MKayes has made his point. TWIA and normal private insurance aren't the answer. He is starting the hunt for something that could work. Perhaps combining TWIA and flood insurance and calling it HURRICANE insurance? Or a county property tax for coastal residents. Adding a hazard tax for coastal residents ? Some affordable way for property owners to build a hazard recovery account is what is needed. Texas City and La Marque payed for a storm levy that was a good storm hazard account.
Flood insurance is a federal program. It would literally take an act of Congress to do what you say. I do agree that there is a need for a government backed program; I am an advocate for market-based solutions wherever possible but this is an area where free markets don't seem to work.
Two salient points for me regarding the post: State Sen. Mayes Middleton on March 10 introduced Senate Bill 2556 to abolish the Texas Windstorm Insurance Association (TWIA):
1. How can such “Bill” effectively force private-market property insurers to offer such coverage to consumers at no increased cost? And,
2. The “Bill” had no co-sponsors Friday and hadn’t moved past the filing phase. So, becoming effective is probably using a quote by pugilist Muhammad Ali and his fight with Frazier: “Frazier's got two chances. Slim, and none. And Slim just left town!”
Just my thoughts. (94)
He is absolutely clueless.
If you are old enough, you may remember when we first went to TWIA coverage. This was a time when many insurance companies were leaving Texas because they did not want to be forced to cover wind damage. If Mayes Middleton bill passes, look for many of the companies to leave Texas, and we will be stuck with few choices as who we have as insurers.
"The Texas Windstorm Insurance Association (TWIA or Association) was established in 1971 by the Texas Legislature to provide wind and hail coverage to applicants unable to obtain insurance in the private market. The Legislature’s action was a response to market constrictions along the Texas coast after several hurricanes. "
Also not being talked about by Mayes Middleton, is what this does to the Catastrophe Reserve Trust Fund (CRTF).
He failed to respond to GDN many times, says he is trying to hide something.
If Mayes is reading this, when are you going to have a public question and answers open debate, about this issue and the beach issue.
mayes middleton gave us a clue of what he's all about with his bill to alter Texan's beach access. Too bad we have to wait so long to say "so long" to mayes and his really bad decisions.
TWIA was created many years ago. The Senator who authored the bill was State Senator A.R. “Babe" Schwartz of Galveston. I heard him speak at a hearing years ago after the State "fixed" it. LOL. Schwartz told them that they just gave TWIA to the insurance industry and how do you think this is going to work out. It didnt. Most homeowners are going to be giddy about TWIA going away....until they get their bill. There is no way they can maintain the same cost for insurance for those on the coast. It just isn't going to happen. Back in 2003 Texas "reformed" homeowners insurance and look at us now, 20 years later. Texas has some of the highest premiums in the nation, specifically right here in this area. But...its not high enough for people to elect better legislators.
I never thought I would miss Larry Taylor.
The GalvNews isthe only paper in Mayes' district. He doesnt seem to want to explain his actions to his constituents. Maybe he has sold out to lobbiests and does not plan to seek any more public offices.
If you really knew who Mr. Middleton is... you would know that one of his major bill proposals as a representative was to eliminate Paid Lobbyists! As a Senator, he is even more vested in seeing this bill passed.
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