Insurance Commissioner Approves Rate Increase for Texas Windstorm Insurance Association


Part of Long Term Plan to Build Up Catastrophe Fund

AUSTIN, TX – November 16, 2007 – The Texas Department of Insurance (TDI) granted a portion of rate increases requested by the Texas Windstorm Insurance Association (TWIA), the state’s insurer of last resort for windstorm coverage. As part of the rate change, TDI is targeting a larger portion of the premium dollars for adding to TWIA’s catastrophe reserves.

Texas Insurance Commissioner Mike Geeslin approved rate increases of 8.2 percent for residential and 5.4 percent for commercial properties, effective February 1, 2008. TWIA had requested a 10 percent increase for both in a filing made this past August. Much of the rate increase comes from raising the portion of the rate intended for adding to TWIA’s Catastrophe Reserve Trust Fund (CRTF) to 25 percent. The catastrophe fund has not kept up with the growth in TWIA exposure over the last few years—as TWIA has experienced significant increases in new policyholders as a result of private insurance companies pulling away from the designated catastrophe area.

“This increase is a necessary part of our long-term strategy to improve the financial health of the Windstorm Association,” said Commissioner Geeslin. “Money put into the CRTF is available as a safety net to pay losses in the event of a major hurricane, unlike reinsurance that has been purchased the past several years.” The Commissioner noted that other measures are under consideration as well to shore up the financial strength of TWIA, including alternate funding sources, loss mitigation efforts, and administrative controls.

Based on estimated average annual premium for a residential TWIA policy of $1,023, the rate increase would add $84 per year to the cost of the typical policy. TWIA policyholders would see the increase at the time of their policy renewal, beginning February 1, 2008.

For more information about homeowners insurance and windstorm coverage, visit ( or call TDI’s Consumer Help Line at 1-800-252-3439.


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