TWIA hikes insurance premiums 5 percent - The Business Journal

Homeowners who depend on the state's Texas Windstorm Insurance Association    for protection will incur a 5 percent rate increase next year.

The TWIA board of directors on Tuesday approved a 5 percent increase in premium rates for all policyholders, the Texas Tribune reports. However, the insurer has not decided whether to adjust premium rates based on a particular area's likelihood of severe storm damage.

Commercial and residential properties along the Texas coast and in parts of Harris County purchase coverage from the state-run insurer of last resort.

TWIA collects about $80 million in premiums each year under the current rate structure, but it says it needs more than $250 million to fund total losses, the Tribune reports.

The association's actuarial committee in April approved a proposal to base next year's premium rates on a particular area's risk of severe storm damage. The move could reduce premiums by as much as 10 percent for some counties, while increasing it as much as 10 percent in other areas — including Galveston and Harris counties, the Tribune reports. The board could still approve the proposal to take effect next year.

The 5 percent increase is awaiting approval from the insurance commissioner. TWIA increased residential and commercial premiums by 5 percent the past two years and by 10 percent the year before.

Olivia Pulsinelli is the web producer for the Houston Business Journal's award-winning website.

16 May, 2012