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Texas regulator rejects TWIA's proposal to increase maximum liability limit

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Texas regulator rejects TWIA's proposal to increase maximum liability limit

Texas Commissioner of Insurance Kent Sullivan rejected a proposal from the Texas Windstorm Insurance Association, or TWIA, to increase its maximum liability limits for certain property in 2019.

The insurer had proposed increasing the limits by 4.2% to approximately $1.8 million for dwellings; by 4.5% to $391,000 for property within apartments, condominiums or townhouses; and by 3.9% to about $4.5 million for commercial structures.

The changes would have affected policies delivered or renewed on or after Jan. 1, 2019.

The insurer is required by law to annually file proposed inflation adjustments to the maximum liability limits under its windstorm and hail policies. These adjustments must be based on changes in the Boeckh Index, which measures construction costs. But the cumulative adjustments to the limits since 1997 have "significantly exceeded" the increases in the weighted average index, according to an order from the commissioner.

TWIA's 2016 filing to keep the limits the same for the 2017 coverage year was approved. But proposals to raise its maximum liability limits for the coverage years of 2013, 2014, 2015, 2016 and 2018 were all rejected.