The Texas Windstorm Insurance Association puts more burdens on the taxpayer than any similar entity in any other state. Premiums on high-end houses do represent a large share of TWIA’s total income but they also represent a large share of total risk placed on taxpayers. If the state is to maintain a publicly run wind insurer, it should focus its efforts on people of modest means.
TWIA’s maximum coverage rates are excessive when compared to other state wind pools.
High end homes in Texas represent a disproportionate share of TWIA’s risk exposure and therefore a disproportionately high share of the root causes of the state’s hurricane tax risk. The private market for high value dwelling coverage is extremely competitive and robust, even at the most vulnerable coastal locations.
If TWIA lowers its coverage limits, it will consume less premium dollars, but reduce the risk on taxpayers. Decreasing the threat to the public treasury coupled with the depopulation of TWIA should be the goal of any type of reform.
