TWIA meeting in Galveston

Donna Graham, a Farmers Insurance agent in Galveston, tells the Texas Windstorm Insurance Association Board of Directors that high windstorm rates is driving homeowners away from the island during the board’s meeting at The Tremont Hotel in Galveston on Tuesday, Aug. 6, 2019.

Galveston home and business owners got a bit of good news this week when the Texas Windstorm Insurance Association board voted to keep its rates the same for 2020.

The windstorm board voted 5-3 Tuesday to submit a plan to the Texas Department of Insurance that recommends a 0 percent rate increase.

The association had until Aug. 15 to submit a proposed rate for 2020.

Windstorm insurance is a special type of policy that covers damage caused by high winds, such as those generated by a hurricane. The association was created as the insurer of last resort for property owners in Texas coastal counties. The association had about 202,000 insurance policies in force as of March 31.

The vote was in contrast to the association’s 2018 decision to propose a 10 percent increase to residential and commercial policy holders.

That proposal was blocked by Texas Gov. Greg Abbott, who called on the legislature to make changes to the way the windstorm association operates.

The lawmakers passed bills calling for reform and study of the association’s funding structure, but some of the changes made don’t go into effect until Sept. 1, officials said.

Tuesday’s decision to not seek the rate increase was to give the association time to come into compliance with the new rules.

“There’s a lot in there that they haven’t put into practice yet,” Rep. Mayes Middleton said. “It’s really not right to vote on something with a rate increase right now.”

There is a caveat, though, the association’s board could reconsider its decision at its next meeting in December.

The association has for years argued it lacks the funds to fully cover the policies. A document on the association’s website stated that the association’s current rates are “inadequate by 41.7 percent for residential coverage and 50 percent for commercial coverage.”

But with the caveat in place, state officials — particularly the commissioner of the Texas Department of Insurance, who has to approve any rate changes higher than 5 percent — should monitor the effect of the changes to determine whether rate increases actually are needed.

• Dave Mathews

Dave Mathews: 409-683-5258;

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