What is TWIA insurance?
Texas Windstorm Insurance Association (TWIA) was created by the State of Texas as the insurer of last resort for wind and hail damage for property owners on the Texas Gulf Coast. Prior to 2009, TWIA was funded by a combination of premiums from policyholders, assessments on property insurers who write policies in Texas, reinsurance, and ultimately state tax credits. The funding from premiums, assessments to insurers, and reinsurance were limited to predetermined levels. Any amounts that TWIA paid out above these levels were funded with tax credits that reduce the
How much did TWIA pay for Hurricane Ike?
TWIA has paid $320 million for Hurricane Dolly claims and will pay over $2.3 billion for Hurricane Ike claims. Hundreds of millions of dollars of this cost will be borne by Texas taxpayers as well as all Texas property insurance policyholders through higher premiums. All of these funds have been spent at the discretion of a single person—the general manager of TWIA—without any effective oversight or guidance.5 The decision to pay an inflated percentage for wind damage, as well as exorbitant attorneys’ fees demanded in the Ike slab claim settlement without any compromise or bargaining, was the decision of a single person who does not answer to the voters, the Legislature, the Department of Insurance, his own board, or market forces.
How many slab claims were settled?
Roughly half of the more than 2,500 slab claims settled were lawsuits filed by individual claimants represented by a lawyer. The other half were included in the settlement of a class action lawsuit in which a small group of the same lawyers represented the class.
When did Hurricane Ike hit Texas?
In the wake of Hurricane Ike’s landfall on the Texas coast in September 2008, thousands of lawsuits were filed against TWIA by owners of property damaged by the hurricane. What happened is that a small group of plaintiffs’ contingency fee law-
Ike, Lawsuits, and TWIA’s Problems Revealed
- In the wake of Hurricane Ike’s landfall on the Texas coast in September 2008, thousands of lawsuits were filed against TWIA by owners of property damaged by the hurricane. What happened is that a small group of plaintiffs’ contingency fee law- In 2005, Hurricane Rita resulted in approximately 14,000 claims. Hurricane Dolly, in July 2008, produced just over 8,300 claims. I…
The Settlements
- Roughly half of the more than 2,500 slab claims settled were lawsuits filed by individual claimants represented by a lawyer. The other half were included in the settlement of a class action lawsuit...
- At the time the lawsuits were filed, TWIA had already made payments with respect to all of these claims. These initial payments made were 10% of the value of the dwelling and 5% of t…
- Roughly half of the more than 2,500 slab claims settled were lawsuits filed by individual claimants represented by a lawyer. The other half were included in the settlement of a class action lawsuit...
- At the time the lawsuits were filed, TWIA had already made payments with respect to all of these claims. These initial payments made were 10% of the value of the dwelling and 5% of the value of the...
- The plaintiffs in the lawsuits alleged wind damage exceeding 60% for structures entirely destroyed and washed away in the storm. However, no plain- tiffs’ experts were deposed on these allegations.
- Despite the fact that the only experts deposed in any of the cases were the two experts for T…
Example of A Typical Slab Claim Lawsuit
- TWIA has produced a copy of one of the individual slab claim files as an example of what a typical file might look like and contain. This individual slab claim involved a policyholder with dwelling coverage in the amount of $80,000. The policy excluded damage caused by storm surge and other floodwater (as do all TWIA policies), and the policyholder did not have flood insurance. TW…
Summing Up
- TWIA has paid $320 million for Hurricane Dolly claims and will pay over $2.3 billion for Hurricane Ike claims. Hundreds of millions of dollars of this cost will be borne by Texas taxpayers as well as all Texas property insurance policyholders through higher premiums. All of these funds have been spent at the discretion of a single person—the general manager of TWIA—without any effective …
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