A Sabine Pass, Texas, house gets a ten-foot
elevation retrofit in February. Rebuilding efforts in Texas are
complicated by a fiscal crisis in the state's homeowners' insurance
program for coastal residents. Photo by Mike Moore/FEMA
As hurricane season approaches, the politics of coastal windstorm
insurance is heating up in vulnerable states. Alabama and Texas are
the latest states to see coastal insurance issues rise to the top
of the legislative agenda. But in both states, resolving the views
of coastal residents and inland residents is proving a complicated
task.
In Alabama, coastal residents and their representatives are
complaining of high premiums and a lack of coverage. In coastal
Alabama, state insurance commissioner Jim Ridling recently
reported, insurers charge coastal homeowners more, not just for
storm coverage, but for unrelated risks such as fire. The
Press-Register covers that story ("
Home
insurers socking coast: It's not just the hurricane coverage that's
costly," by Jeff Amy).
Alabama legislators have responded with bills that would require
discounts on policies for homes that were built in compliance with
the 2006 International Residential Code (IRC), which has tougher
provisions for wind-resistant construction than did older Alabama
standards (see "
Coastal
insurance bills advance in Alabama Legislature," by Bryan
Lyman). Even deeper discounts would apply if a house complied with
the "
Fortified for
Safe Living" standard, an above-code construction specification
published by the Institute for Business and Home Safety. The bill
passed a state House and Senate joint committee without
controversy. However, procedural tactics could stall further
progress in the full House and Senate.
In Texas, the Houston Chronicle reports, lawmakers are
struggling with an impending insurance crisis (see "
Lawmakers
debate windstorm insurance," by Kelley Shannon/Associated
Press).
With private insurers backing away from the coastal market, the
Texas Windstorm Insurance Association (TWIA) — the state's
fallback insurer for homeowners who can't find other insurance
— is short of cash. If another storm like Ike were to strike
Texas this year, the association could run out of funds to cover
the damage. That would leave homeowners in deep trouble in fourteen
Texas coastal counties where the TWIA is the only game in town.
Texas' fourteen coastal counties —
from Cameron in the south to Jefferson in the north — depend
for hurricane coverage on the Texas Windstorm Insurance
Association, an organization that state Representative John Smithee
describes as "broke."
The problems are complex, and proposals on the table include a
variety of approaches — from replenishing the TWIA's
reserves, to encouraging private companies to re-enter the market,
to capping insurance coverage for all properties on the coast (and
even excluding second homes from coverage altogether). That last
idea, floated by Amarillo Representative John Smithee, generated a
storm of resistance from coastal legislators. Quoted in the
Beaumont Enterprise, Representative Allan Ritter, from Nederland,
Tex. (near Port Arthur), said "As written, [Smithee's] bill - from
Brownsville to Beaumont - would be economically devastating to the
entire coastal region." (See "
House
bill blows away windstorm insurance coverage along Texas
coast," by Dan Wallach.
As tough as the issues are, Texas lawmakers have scant time to
reach a solution. As a part-time body, their legislative session
ends June 1 — the official first day of hurricane season.