Insurance Journal - Nearly four years after Hurricane Ike made landfall near Galveston Island, coastal residents are still filing claims and hundreds of lawsuits. Most of the legal activity is aimed at the Texas Windstorm Insurance Association (TWIA), which provides homeowners along the Texas coast with windstorm coverage. Hurricane Ike with Category 2 winds and its Category 4 storm surge blasted Galveston and surrounding communities on Sept. 13, 2008. Insured losses from Hurricane Ike reached $12 billion becoming the state’s costliest weather catastrophe by far. Insured losses paid by TWIA are expected to total around $2.4 billion, according to the Insurance Council of Texas. Three law firms are responsible for the bulk of the lawsuits claiming TWIA owes homeowners more money for windstorm claims. In 2011 Texas lawmakers placed a new one year time limit on future storm claims and ordered policyholders to seek appraisal and mediation instead of lawsuits. Appraisal and mediation will more quickly resolve any disputes and do so without the need for costly and protracted litigation. In addition, TWIA policyholders who elect to resolve disputes through arbitration can receive a discount on their premiums. “The statute of limitations on claims and lawsuits will ultimately end this insanity of litigation filed well after the storm and in many cases, filed after the claims had been settled,” said Mark Hanna, a spokesman for the Insurance Council of Texas. The Texas Legislature also established new funding levels for paying for claims from future hurricanes. As of now, TWIA has approximately $800 million available to pay for losses, and any losses above that level, would be paid through the issuance of bonds. These bonds would be repaid by insurance companies and surcharges on insurance policyholders living along the Texas coast. TWIA has also purchased reinsurance to help pay for additional claim costs up to approximately $3.5 billion. TWIA was created in 1971 to become an insurer of last resort for windstorm coverage. Today, however, TWIA has grown to include nearly 70 percent of all windstorm coverage along the Texas coast with a total liability of almost $80 billion. - Go To Story
Monday, September 10, 2012
 
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