Quantcast

TWIA delays decision on receivership - 12 News KBMT and K-JAC. News, Weather and Sports for SE Texas

TWIA delays decision on receivership

Posted: Updated:

The Texas Windstorm Insurance Association delayed a decision of receivership late Monday afternoon. It's considering receivership, which means it could give power to the state's Insurance Commissioner in order to resolve outstanding claims.

A meeting was held Monday regarding the future of the agency that provides windstorm coverage to hundreds of thousands of people along the Gulf Coast.

TWIA is facing financial troubles stemming from claims and lawsuits following Hurricanes Rita and Ike. After Hurricane Ike, TWIA paid out around $2.7 billion in claims.

Now, the trust fund has only around $100 million. It's a concern because there's not enough money to pay out claims during the next storm.

Cole Gober has been an insurance agent in Beaumont for 33 years. When the eye of a hurricane strikes Southeast Texas, he watches insurance claims pour in and premiums go up.

"Any time there's an increase in money paid out in claims, it will affect your insurance most likely," says Gober, an State Farm agent.

After Hurricane Ike, TWIA paid out billions in claims and the lawsuits are still being filed.

"We've had over 2,000 lawsuits or claims filed since September 2012, four years after the actual event and this is just bleeding TWIA dry," says Jefferson County Tax Assessor Collector Shane Howard.

Gober agrees saying, "There's not any wind storms out there that we've had since Ike. They're just trying to keep their head above water using money to pay lawsuits that have been filed and pay attorney fees."

With TWIA on life support, Howard believes policy holders will not be affected by a receivership.

"TWIA's inability to pay catastrophic claims now is not increased by going into receivership.  TWIA will still continue to issue policies, renew policies, and cover those policies as losses occur.  The real big problem is when we have catastrophic events," says Howard.

But, Gober believes the attorney fees will end up costing the consumer.

"An every day policy holder will realize and increase in premiums, most likely," says Gober.

Insurance agents across the coast watch TWIA's next move and hope Texas stays out of the storm's path.

"How bad is it going to get? I don't know. I just hope we stay hurricane-proof for awhile," says Gober.

State Representative Joe Deshotel released a statement Monday saying receivership is unnecessary and unwarranted. Deshotel says insurance agencies should be assessed, meaning they should chip in to the windstorm pool.

The TWIA board member will meet again on this issue on May 21.

Powered by WorldNow

Newsroom: (409) 838-1212
Front Desk: (409) 833-7512
News Fax: (409) 981-1564
News Email: 12News@kbmt12.com

Powered by WorldNow
All content © Copyright 2000 - 2014 WorldNow and KBMT. All Rights Reserved.
Users of this site agree to the Terms of Service, Privacy Notice/Your California Privacy Rights, and Ad Choices.