TWIA Claims From Ike May be Less Than Expected

Two weeks after Hurricane Ike hit Galveston, Texas, on Sept. 13, the Texas Windstorm Insurance Association — the state’s insurer of last resort for wind coverage along the coast — was fielding many thousands of claims per day. As of Sept. 24, the insurer had logged around 50,000 claims, and was estimating the cost of damages from Ike would ultimately come in around $3 billion to $4 billion.

TWIA in September voted to assess member companies — all insurers selling property coverage in Texas are required to participate — $430 million to help cover the cost of Ike claims. Texas Insurance Commissioner Mike Geeslin told lawmakers at a hearing on Sept. 24 that around $230 million of that initial assessment would be subject to premium tax credits over a five-year period.

Earlier in the year, TWIA assessed member companies $100 million for losses related to Hurricane Dolly, which hit near Brownsville in July, racking up more than 8,000 claims totaling about $280 million.

TWIA’s board on Oct. 8 voted to delay any more assessments to member companies until later in the year.

Commissioner Geeslin in June approved the purchase of $1.5 billion in reinsurance for the wind pool. TWIA has collected $500 million in reinsurance this year to cover claims, the Associated Press reported.

As with 2005 Hurricanes Rita and Katrina, storm surge has become something of an issue with claims resulting from the storm. Johns has acknowledged that “TWIA recognizes that the question of whether the damage was caused by flooding or wind will become an issue.” In a statement released on behalf of the association in late September, Johns clarified that all claims “will be carefully inspected by an adjuster to determine what falls within the appropriate TWIA contract.”

Rumors that the association would deny Hurricane Ike claims on a blanket basis were misleading and untrue, Johns maintained.

Topics Texas Claims Hurricane