A Texas consumer group took issue with the state-chartered windstorm insurance association over its refusal to pay coastal residents for storm surge damage in Hurricane Ike.
The Texas Windstorm Insurance Association says it only intends to pay Gulf Coast policyholders for wind damage, not water surge damage. Association general manager Jim Oliver said on a conference call with industry representatives: “It will be our intention not to pay surge losses. Period.”
Each claim will be examined on a case-by-case basis, and no one area will be classified as damaged completely by storm surge, he said. Areas farther inland are likely to have more wind damage and less storm surge damage, Oliver added.
But Alex Winslow, executive director of the consumer group Texas Watch, contends losses from water damage should be covered because there would be no storm surge without the hurricane.
According to the National Hurricane Center, storm surge “is simply water that is pushed toward the shore by the force of the winds swirling around the storm. This advancing surge combines with the normal tides to create the hurricane storm tide, which can increase the mean water level 15 feet or more.”
Flood insurance must be obtained through the federal flood insurance program, said Sandra Helin, spokeswoman for TWIA and the Southwestern Insurance Information Service. She said less than 20 percent of Galveston County property owners had flood insurance policies.
Many residents felt they would be protected by the island’s 17-foot seawall, but much of the storm surge came from the bay side of the island, she said.
About half of the new $430 million assessment can by recouped by insurance companies through state tax credits. At a certain point, which has not been reached, unlimited assessments on insurance companies can kick in to supplement the fund. Those can be recouped by insurance companies through tax credits, meaning Texas taxpayers would foot the bill.
On the Net:
Texas Windstorm Insurance Association, www.twia.org/
Southwestern Insurance Information Service, www.siisinfo.org/
Texas Department of Insurance, www.tdi.state.tx.us