The House-Senate compromise relies in part on bonding to replenish the windstorm account to pay for claims after a major hurricane. The state-chartered Texas Windstorm Insurance Association -- the only property insurer for residents and businesses in 14 coastal counties -- was depleted after last year's Hurricane Ike slammed Galveston and southeast Texas.
Gov. Rick Perry, legislative leaders and insurance industry representatives warned that something had to be done to restore the fund before another big storm hits Texas. Hurricane season begins Monday.
Perry had warned he may call a special session if the matter didn't get addressed.
"We got a good program here that's good for the inland folks as well as the coast," said Rep. Larry Taylor, R-Friendswood, before the House quickly approved the measure.
House Speaker Joe Straus said the legislation "is critical to providing Texans the tools necessary to financially recover from the ravages of hurricanes."
Sen. Troy Fraser, R-Horseshoe Bay, said one provision of the compromise plan calls for the state to provide a bridge loan to the windstorm fund until 10-year bonds can be issued after a major hurricane strikes. Coastal residents would provide initial money for the fund through their insurance premiums, he said.
Insurance companies would also pay into the account once the funding needs reach a certain level public policy and is fair to coastal residents.
Reaching an agreement on overhauling the windstorm insurance fund was one of the trickiest issues this legislative session.
Coastal and inland representatives had trouble for months finding common ground that they thought would be fair to all their constituents.
Furthermore, windstorm legislation was among numerous bills jeopardized by a stalemate in the House during Memorial Day weekend over an unrelated voter identification proposal. But senators managed to tack the windstorm bill onto other legislation and it proceeded to a House-Senate negotiating committee by the end of the session.
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