Gulf of Mexico
Jon Shapley, MBO / Associated Press

TX - Government Insurance for Hurricanes and Floods Going Broke

Real estate is the most valuable asset most people will ever possess, and insuring against natural disasters like floods and storms is common sense.

Or so you might think. Two government-mandated programs are in financial straits, with critics asking if they should exist at all.

The Texas Windstorm Insurance Association is still kicking the financial can down the road to avoid raising rates because coastal property owners do not want to pay their fair share. Meanwhile, San Antonio-area homeowners are allowing their federal flood insurance to lapse as memories of past floods fade.

When disaster strikes—and we know it will—taxpayers will be left picking up the tab for others’ foolish decisions.

The windstorm association, a quasi-government entity known as TWIA (TWEE-ah), provides coverage to more than 190,000 properties in 15 coastal counties that no private company will insure. That includes 57,433 properties in Galveston, 36,691 in Nueces, 29,524 in Brazoria and 24,311 in Jefferson.

TWIA requires property insurers to contribute to the association to lower the costs for high-risk property owners. But the Legislature also requires the owners to pay their fair share, and lately, they have been getting a considerable discount.

Hurricane Harvey and other storms have drained TWIA’s cash reserves, and the growing severity of hurricanes means premiums need to go up. In December, TWIA’s actuaries determined that TWIA needed to raise premiums 44 percent on residences and 49 percent on businesses.

TWIA’s staff recommended the board begin by raising rates just 5 percent to put the insurer on the path to solvency. But property owners reacted as if TWIA planned to evacuate the Texas coast permanently.

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