Windstorm insurance could be changing for Gulf Coast owners

March 21, 2013 4:42:57 PM PDT
We're following a developing story that concerns home and business owners across the Gulf Coast. Texas windstorm insurance is about to hold a vote which could put thousands of policy holders in a tough spot.

If you live along the coast or own a business there, you must have windstorm insurance or you cannot get a mortgage. Thursday, the agency that provides that coverage announced it may end up in receivership beginning next week.

The Texas Windstorm Insurance Association paid out billions in claims after Hurricane Ike hit our area. At that time every insurance company in Texas chipped in to the windstorm pool pay those claims. The companies then charged every policy holder a tax to recoup the losses.

Now the funding mechanism has changed and the catastrophe reserve trust fund only has about $100 million in it -- not enough to pay out claims during the next storm.

Galveston lawmaker Rep. Craig Eiland says the windstorm agency needs to go back to its previous funding method because it is the only way gulf coast residents can get any windstorm insurance.

"The board can reassess the companies now -- today, tomorrow, next week -- for the money and premiums they paid out in claims since Hurricane Ike," Rep. Eiland said.

The Texas windstorm meeting is Monday. We'll continue to follow this and let you know the outcome.

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