Residents of Texas weren't the only ones hit hard in the state by Hurricane Beryl. The Texas Windstorm Insurance Association, or TWIA—which Chron describes as "an insurer of last resort for many Texans, giving policies only for wind and hail damage to customers who have been denied coverage in the public market"—said last week that it expects to use half or so of the $450 million in its catastrophe fund to pay out on the 16,000 claims it's received so far due to the Cat. 1 weather event. Beryl "will be a significant storm for us," and it will likely end up making 2024 the third-costliest year for the agency ever, chief actuary Jim Murphy told AM Best last week. That claims figure could jump to more than 20,000, with payouts exceeding $200 million, and consumers may not like the resulting impact.
On July 15, the agency's underwriting panel met to talk about possible rate changes, and after a 5-1 vote, it decided to recommend to TWIA's board that premium rates be upped by 10% for residential and commercial policies. "I don't think there are any easy answers," lamented committee member David Futterlieb, who put in the motion for the rate increase. A BestWire analysis found that current residential insurance rates in Texas are "inadequate" by 38% (a spike of 18% from the previous year), while commercial rate inadequacy has gone up more than twice as much, to 45%.
The Lone Star State has already been bogged down by rising property-insurance costs of late due to inflation affecting labor and construction costs, as well as an uptick in both the number of natural disasters and the intensity of them. A recent NerdWallet survey found that Houston had the most expensive average rate for homeowners insurance in the US, at $6,610 per year (around $550 per month). The lone dissenter in last week's vote, Georgia Neblett, who serves as the board's vice chair, tells AM Best that "if we went to rate adequacy, it still wouldn't fix our problem," but it would "impact people's ability to live and work here ... these aren't rich people." (More Hurricane Beryl stories.)
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