More Twouble for TWIA policy holders

I've blogged about this before, now the law is taking effect and home and car owners may feel the sting of insurance reform. Again. From the Bay Area Citizen:

If a major storm comes through the area homeowners might get hit with more than property damage 

As a result of new Texas Windstorm Insurance Association rules that went into effect this year policy holders could also get hit with a surcharge to help pay for the damage.

Because of gross mismanagement of TWIA, this surcharge will be added to homeowners policies and auto policies and it doesn't matter where the storm hits, if the TWIA funds are exhausted, everyone on the coast will pay for it. So because of gross mismanagement of TWIA, Texans on the coast will bail them out. Sound familiar? Maybe TWIA is too screwed up to fail.

The new law also ushers in a complicated arbitration process homeowners must execute prior to filing a suit for damage. This process is so complicated it will require an attorney. It is very similar to the one created by the Texas Residential Construction Commission back in 2003 to resolve new home construction defects. This process and the TRCC was dissolved in 2009 after 6 years of incredible failure. TWIA will now give it a try on behalf of homeowners.

TWIA was created in 1971 as an insurer of last resort. It covered about 6% of homes in the coastal areas. The others were covered by private insurance. Now, after 10 years of reform, TWIA covers over 75% of the homes in the coastal area, becoming the only resort for many while the "free market" insurance companies "flee the market" for safer ground.

I remember a time when TWIA was not perfect. Now it is just simply screwed up.

SIR Larry Taylor and TWIA

State Insurance Representative (SIR) Larry Taylor is a Texas State Senator and owns an insurance agency in Friendswood (with a website that sucks). Taylor is well known for ushering in insurance reform of 2003 on behalf of the insurance industry. He has also come to the defense of the industry especially when agencies like TWIA (Texas Windstorm Association) are sued for not paying claims. Recently he was in the New York Times:

Now, in a deposition obtained by The Texas Tribune, the former head of the insurance association, Jim Oliver, said that two top Republican lawmakers, including the powerful lieutenant governor, David Dewhurst, [and SIR Larry Taylor] tried to pressure him into fighting more cases in court. He said Dewhurst complained that fees paid to lawyers in settlements were ending up in the coffers of Democratic rivals.

Taylor and Dewhurst were mad at the head of TWIA for settling lawsuits filed by Steve Mostyn, a top donor to the Democratic party. They were not mad at TWIA for not paying claims. They were not mad about the skyrocketing cost of TWIA insurance. (Taylor makes money from selling TWIA policies) They were not mad about TWIA covering 76% of the coastal area when they used to cover only 6%. And they were not mad about the insurance industry pulling out of the coastal areas requiring TWIA to cover the difference.

No, they were mad about a Democratic donor settling claims by representing TWIA homeowners. Something Taylor and Dewhurst are not interested in.

Dewhurst: Time to put the Twoubled TWIA down

Once again, Greg Abbott is missing.

Take a functioning, not perfect, but functioning organization and reform it till it fails, then call for it's abolishment. That is what out going Lt Governor, David Dewhurst, has suggested. From KRIS in Corpus Christi:

Dewhurst wants a senate committee to find a way, over time, to move people under T.W.I.A. coverage to private insurance carries, hopefully, at competitive rates.

Over the last decade we have moved in the opposite direction moving people, over time, under private insurance carriers, to TWIA. TWIA used to cover about 6% of property on the coast. They were considered an insurance of last resort. TWIA now covers over 75% as the "free market" has fled the market leaving property owners with no resort. This was a result of the massive insurance reforms of 2003 that has, obviously, failed miserably.

Now Dewhurst wants to fix the damage he and Rick Perry created and guess who is going to pay for this? Go ahead and guess. I will give you a hint. It starts with "W" and ends in "E". There is no doubt TWIA is in serious financial trouble. According to KRIS, TWIA insures  $84 billion worth of property in Texas coastal areas, but has about $200 million in cash. 

I've said this before:

So after a decade of promises of lower rates, better coverage, and lower premiums, the people along the coast, who voted for the people who made these promises, are now going to be the people who pay for it. The only thing they have left is to laugh at themselves for being such incredible, gullible, fools and for doing nothing about it.

If all the people on the coast were Teabaggers, I would be pointing my finger at them and laughing.

TWIA and the TRCC. The past failures return to TWIA

In 2003 the Texas Legislature caved to the home builders of Texas and created the Texas Residential Construction Commission. (TRCC) The Commission was supposedly designed to protect homeowners with construction defects  yet just 6 years later the Texas Sunset Commission called for its abolishment. From the Sunset Report:

This recommendation would abolish the Texas Residential Construction Commission as an independent agency and repeal the Texas Residential Construction Commission Act (TRCCA). 

The Commission was so flawed even lobbying by Bob Perry, the home builder and owner of the Republican Party at the time, could not save it. It died.

Unfortunately the Texas Windstorm Insurance Association has adopted one of the most worthless parts of the TRCC, the Alternative Dispute Resolution Process. This process which was advertised as the shining star of the TRCC requires homeowners to submit to a lengthy process of inspections, boards, and appeals before filing a suit in court. The supporters of this claim it will help homeowners get their homes fixed in a timely manner instead of having to get an attorney and file a suit. Here is the process defined in a report by TWIA. 

That is exactly what they said about the TRCC and it failed miserably. The process is complicated requiring the help of an attorney. The process is lengthy which will drag on the complaint, by design. And the consequences of not following the process could severely limit your settlement. Instead of demanding that TWIA pay claims, the Texas Teabaggers just simply made it harder for homeowners to sue.

At least they gave the homeowners the right to sell their Constitutional right to a trial by jury for a few dollars. Arbitration is the 21th Century version of snake oil. It is a private, secret, justice system that will require legal representation and additional costs to the homeowner. It is a suckers court. According to the new rules of TWIA:

TWIA may offer a premium discount or credit against a surcharge not to exceed 10 percent of the premium, if a person elects to purchase a binding arbitration endorsement.

So to save a few dollars homeowners can now get screwed twice. Nice.

Texas new law requires coastal residents to bailout TWIA

This is almost funny.

After a decade of "reforms" of the insurance industry, the Texas Windstorm Insurance Association is on the brink of financial ruin. Prior to 2003 TWIA covered only 6% of the coastal areas, a truly last resort insurance option. Today they cover over 70% becoming the only resort for most home owners. And now after massive failure, the Texas Legislature passed a bill that allows TWIA to pass a surcharge to those in the coastal areas to bail out TWIA. From the Brownsville Herald:

The updated rules provide for a surcharge on auto and property insurance policies to help pay for claims if TWIA reserves are exhausted and if the first level of “post-event” bonds issued aren’t sufficient to cover claims.

So after a decade of promises of lower rates, better coverage, and lower premiums, the people along the coast, who voted for the people who made these promises, are now going to be the people who pay for it. The only thing they have left is to laugh at themselves for being such incredible, gullible, fools and for doing nothing about it.

So if you want to blame someone, blame yourself. If you want to complain, contact your State Representative, John Davis. He will be retiring and paying his insurance bill with your tax dollars. Your State Senator, Larry Taylor, owns an insurance agency and sells TWIA policies. You will be bailing him out also.

It's almost funny.

Greg Abbott "I'm clueless about home insurance rates"

This shouldn't surprise anyone. In an interview by KERA it was clear Abbott was not interested and will do nothing to help homeowners with skyrocketing insurance rates, especially those in the TWIA area. From KERA:

Abbott said he didn’t know enough about actuarial insurance tables to know if rates were out of line. He needed more information.

Abbott has been the top attorney in Texas for over a decade, giving away sweetheart settlements to Farmers Insurance for over charging homeowners and doing nothing to stem the rising cost of insurance. He doesn't need any more information because he doesn't intend to do anything about it unless it helps the insurance industry. 

The people in Seabrook, Kemah, and surrounding areas should be concerned. Not only are their rates out the roof, Abbott and company are now considering scrapping the insurance of last resort, TWIA, replacing it with the miracle of the free market, the same free market that has fled the market. How do you think that will work out? 

Davis has the right idea. She would throw the Insurance Commissioner out the door and appoint someone that would represent the property owners of Texas. She would require the industry to justify rate increases like they did back before insurance reform of 2003. These are great starts.

Abbott on the other hand will do nothing but sit on his ass and watch as homeowners continue to struggle with the skyrocketing cost of insurance. 

Wayne Faircloth running to represent the insurance industry

Just what the gulf coast needs, another insurance salesman and Teabagger as an elected official!

Galveston had years of State Insurance Representative (SIR) Larry Taylor who also made his money selling TWIA policies that didn't pay after Ike. He represented the district north of Galveston but provided protection for the insurance industry across the state. He was/is their go-to guy. He went on to become a State Senator.

Now, Wayne Faircloth, another snake oil salesman, is running for State Representative in order to provide representation and protection for the insurance industry. With Larry Taylor and Faircloth, Galveston property owners will be guaranteed higher insurance premiums and less coverage. If they vote for this snake oil salesman they deserve everything they don't get. You just can't feel sorry for stupid people.

Tonight: The Rising Cost of Home Insurance in the Bay Area

If you have nothing better to do but wonder why your home insurance premiums have skyrocketed over the last decade after insurance reforms of 2003, come on by for a discussion on the topic. From the Bay Area Association of Democratic Women:

The Rising Cost of Home Insurance is Focus of BAAD Women Meeting on Sept. 18 

"John Cobarruvias, a consumer activist in the areas of new home construction and home insurance, will be the featured speaker at the BAAD (Bay Area Association of Democratic) Women meeting on Thursday, September 18. He will share his experiences as an activist and discuss the high cost of home insurance in the Bay Area, the history of home insurance reform and the actions of the Texas Windstorm Association (TWIA)." 

It all happens at the Bay Area Community Center in Clear Lake Park, located at 5002 NASA Parkway (across the street from lake) in Seabrook. The meeting, which is free and open to the public, begins with light refreshments at 6:30 p.m. followed by the program at 7 p.m.