Now an insurance crisis that has swept across the Gulf Coast is spilling into Texas, where increasingly scarce property coverage has forced tens of thousands of coastal homeowners to buy policies from a state-chartered insurance program.
The rapid growth has alarmed officials and insurers. And it’s raised concerns that if a major storm hits Texas, so many claims will be filed that the state-chartered insurer will force insurance companies and residents statewide to help pay them.
The mushrooming problems have made Texas the latest state to feel the effects of the insurance industry’s ongoing contraction in the Gulf area following huge losses from recent storms and litigation.
Many smaller insurers in the region have become insolvent in the past year or stopped covering property in hurricane-prone areas such as the Texas coast. That’s triggered unprecedented growth in the region’s state-chartered insurance programs at a time of devastating storms.
In Texas, the program’s growth poses a threat to insurance companies and policyholders throughout the state because the program has insufficient reserves to pay a deluge of claims that would be filed after a major storm.
Instead, the insurer relies on its authority to assess insurance companies in the state up to $1 billion a year to pay claims — an authority it has exercised four times since 2005.
Approved ~ Primus Pilus
Orange of Specious
Article URL : https://www.eenews.net/articles/growing-insurance-crisis-spreads-to-texas/