Texas Gulf Coast residents should plan to attend the meeting of the Texas Windstorm Insurance Association’s board in Galveston on Tuesday.
The Texas Windstorm Insurance 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.
At issue is whether the association intends to consider an increase in premium rates during the Tuesday meeting.
The association recently issued a document stating its rates “are inadequate by 41.7 percent for residential coverage and 50 percent for commercial coverage.”
The document didn’t state whether the board would be asked to increase rates to address that inadequacy.
But Rep. Mayes Middleton, a Republican from Wallisville, was convinced the association’s board would at least discuss a rate increase.
“It’s obvious that they intend to deliberate a rate increase at their meeting and the bad part about it is that it’s going surprise us once we get there,” Middleton said. “It’s unfortunate that they’re not more transparent about what they want to do.”
Likewise, in a recent Daily News column, Henry Freudenburg, chairman of the Coastal Windstorm Insurance Coalition, a consumer advocacy group, warned that the board planned to deliberate rate increases.
Freudenburg also argued that seeking a rate increase now would be counter to the intent of bills the legislature passed during the most recent session to reform the association’s funding structure.
“Any action by the association to raise rates now would be premature and contradictory to public policy,” Freudenburg wrote.
“With significant funding reforms just recently becoming law, and more reforms likely coming, it is too early to see how all these changes will impact the association, and therefore, too early to call for raising rates.”
Texas Windstorm Insurance Association rate increases of more than 5 percent require the permission of the commissioner of the Texas Department of Insurance. In late 2018, responding to widespread objections from coastal communities still reeling from Hurricane Harvey in 2017, Gov. Greg Abbott stepped in and stopped Insurance Commissioner Kent Sullivan from approving rate increases.
It would have been the seventh of the eight years the windstorm association had raised its rates, for a total of almost 41 percent over that period.
One reason Abbott blocked the rate proposal was to give legislators in the past session a chance to pass reforms, which, as both Freudenburg and Middleton noted, they did.
It’s reasonable to argue the association has no reason to increase rates this year nor any mandate to even deliberate doing so in light of the legislative action.
It seems, however, that it intends to do just that in Galveston on Tuesday. The good part of that is it’s happening here, which means it’s convenient for coastal residents to attend.
Having a large group of ratepayers at that meeting to oppose any increases might not sway the board, but it sure wouldn’t hurt.
• Dave Mathews