Windstorm watchdogs hope to alter bill in House

The state senate bill overhauling the Texas Windstorm Insurance Association wasn’t as bad as it could have been for coastal residents. It wasn’t as good as it could have been either, the president of the Galveston Windstorm Action Committee said.

“My first thought is that we really need to praise our senators, Mike Jackson and (Joan) Huffman,” Lee Otis Zapp Jr. said. “They had been working for over a week to strip a lot of the punitive provisions out of the bill.”

Even with some of the provisions removed, Huffman, R-Houston, whose district includes Bolivar Peninsula and almost all of Galveston Island, voted against the bill, which passed overwhelmingly Thursday. Jackson, Galveston County’s other state senator, voted for it.

Huffman said she voted against the bill because the rate hikes would come too quickly.

“We had wanted seven years (for the rate increases to be phased in), but the compromise was for five years,” Huffman said. “But that didn’t make it into the final version of the bill. It was three years instead, and I just thought that was too much of a burden on my constituents. I know it’s going to be tough on those people.”

Huffman said some burdensome provisions — including surcharges for owners of vacation homes — were eliminated from the original bill.

The fund to pay claims was depleted after the 2008 hurricane season. The estimated $905 million in Hurricane Ike claims are for the most part being paid through assessments to insurance companies that do business in Texas as well as through backup insurance policies known as reinsurance.

According to the Southwestern Insurance Information Service, an insurance industry trade group, the windstorm pool in Galveston County alone covers about $19.2 billion of property. Of the windstorm pool’s 226,000 policyholders, about 90,000 are in the county.

Industry spokesman Jerry Johns said it’s inevitable that a rate hike is coming. Just how much of an increase and how it will be added to premiums is yet to be seen.

“That’s going to be up to the legislature,” Johns said. “We need to have the ability to purchase reinsurance and general revenue bonds. That is essential to protecting the insurers.”

Zapp said other provisions included in the senate bill would hinder public oversight and would give the public less say on future rate increases.

The efforts to reform Texas Windstorm Insurance now focus on the House, where state Reps. Larry Taylor, R-Friendswood, and Craig Eiland, D-Galveston, both members of the insurance committee, are working to formulate an alternative bill.

Eiland, too, said the senate bill was a step in the right direction, but noted the funding mechanism is “fine as long as we don’t have a storm.”

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At A Glance

WHAT: Rally for coastal windstorm legislation

WHEN: Noon Tuesday

WHERE: State Capitol in Austin

BUS: The Galveston Chamber of Commerce has some seats available on a bus headed for the rally. Call 409-763-5326.

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