This week, the Texas Windstorm Insurance Association (TWIA) sent its recommendations to the Texas legislature. Many of the proposals will further the stated goal of lessening TWIA’s liability to the taxpayers.
One of the painful lessons in the aftermath of Hurricane Ike was to assign damage to the proper entity. In numerous cases, three separate adjusters would look at a slab and try to determine if the damage was caused by wind, water or something else. Since scores of homeowners did not carry flood insurance or did not obtain enough coverage, TWIA ultimately paid for damages that might have been caused by forces other than wind. Thus, it is reasonable to require all structures in certain flood zones to purchase flood insurance before the issuance of a TWIA policy.
Additionally, the requirement for all construction in a catastrophe area to be built to strict building codes in order to receive subsidized rates is sensible. Without property mitigation, private insurers will never be comfortable writing policies, which is essential to decrease the size of TWIA.
As in other areas of the law, TWIA must be able to resolve claims with finality. A statute of limitations for lawsuits to be filed gives stability and foreseeability to the process. Two years is adequate time for policyholders to examine their property and file their claims. Since TWIA is continuing to rely on a Catastrophe Fund as part of its financial structure, the inability to end claims proceedings endangers its ability to pay for future losses.
Until next week,
Julie Drenner, Texas Director