Insider's Report Vol. 7, No. 23
One of the greatest issues faced by my constituents is the affordability of windstorm insurance protection. At the beginning of the session, HB 911 and SB 14 proposed several punitive measures that would have penalized coastal residents, forcing them to bear the cost of a financially-sound windstorm insurance system. I played a key role among the coastal delegation in ensuring these bills never moved forward through the legislative process.
Instead, during the final days of session, I helped pass a much more fair and balanced bill in the form of HB 4409. In years without a hurricane, the bill imposes a cap of ten percent on any rate increase. HB 4409 then relies in part on bonding and state loans to pay for claims after a major hurricane, and there are no automatic surcharges for coastal residents as had been proposed earlier this session. Rather, in the event of a costly storm, the insurance commissioner is granted discretion to make reasonable rate adjustments to ensure there is adequate funding to pay off claims. These components together help to remove the threat of an unlimited assessment on private insurance companies, which is expected to result in more companies issuing policies closer to the coast. And more companies competing in the insurance market should mean lower rates for homeowners.
I feel confident that this legislation will provide thousands of coastal residents support for fair and affordable windstorm coverage. It will ensure stability and relief for homeowners and businesses, while still recognizing that 44 percent of the state's total income is linked to key Gulf Coast sectors. HB 4409 achieves a final outcome that is reflective of the tremendous economic benefits that our Gulf Coast brings to the entire State of Texas, and it spreads the responsibility accordingly.