Amidst a statewide debate over regulation of Texas Windstorm Insurance Association (TWIA), significant attention has focused on the wisdom of maintaining TWIA’s current coverage limits.
Here are some facts about the coverage limits for TWIA.
$1.7 Million: Current TWIA coverage limit. (Source: TWIA, www.twia.org)
$152,750: Average structure value of a home in Texas. (Source: Lincoln Institute of Land Policy, www.lincolninst.edu/resources/)
Number of Other Hurricane-Prone States with Residual Market Mechanisms and Policy Limits of $1.7 Million or More: Only One (Source: Florida Citizens Property Insurance Corporation, www.citizensfla.com)
Percentage of Texas Houses on the Market Worth More than $1.7 million: Less than one. (Source: Multiple Listing Service, Queries Conducted 4/20/2011, www.ziprealty.com)
Number of Typical Homes That Could Be Rebuilt for $1.7 Million: Eleven.
Good Reasons for Continuing TWIA’s Subsidies for Expensive Homes: None.
As in insurer of last resort, TWIA should be very limited in scope. Its rapid growth and increasing liability exposure presents significant risk to taxpayers who are ultimately responsible to pay the bill in the event of a major windstorm catastrophe. One simple way to limit this exposure is to lower TWIA’s coverage limit.