Analysis by the Texas Windstorm Insurance Association (TWIA) has concluded that its rates are currently inadequate by 41.7% for residential coverage and 50% for commercial coverage.
This represents a significant increase from last year’s analysis, which found that rates were inadequate by 32% for residential coverage and 37% for commercial coverage.
Since 1988, TWIA has introduced a cumulative rate increase of over 100%, or 2.4% per year on average.
However, increases have accelerated in recent years, with analysts highlighting a cumulative increase of more than 80% since 2006, or 4.8% per year on average.
The report did not recommend a proposed rate filing amount for 2020, nor has the TWIA Board of Directors determined a proposed amount.
Analysis was prepared by TWIA’s actuarial staff, with estimates based on professional judgement and statistical modelling of future weather events.
TWIA explained that any decision on a proposed rate filing for 2020 will be made by its Board at their August 6 meeting.
The rate adequacy information is one of several factors the Board will consider when voting to determine the proposed filing, which will be submitted to the Texas Department of Insurance by August 15.
TWIA provides wind and hail insurance to 14 Texas gulf coast counties and a portion of Harris county, with coverage focused on properties that are denied by other insurance carriers.
In August 2018, TWIA’s Board approved a 10% rate hike for residential and commercial policyholders following its assessment of losses from Hurricane Harvey.
