Cleanup begins in the Houston suburb Riverstone in Fort Bend County after hurricane Harvey and heavy floods in 2017.
Cleanup begins in the Houston suburb Riverstone in Fort Bend County after hurricane Harvey and heavy floods in 2017.
(The Center Square) – The state of Texas has taken action to protect more than 30,000 homeowners living along the Gulf Coast during the height of hurricane season after their Florida-based property and casualty insurance company was forced to close by the state of Florida.
The Texas Department of Insurance issued an emergency rule to protect Weston Property & Casualty Insurance Company customers whose policies will be cancelled Sept. 7. It will enable them to receive wind and hail coverage through the Texas Windstorm Insurance Association (TWIA).
While Weston is based in Florida, it holds a Texas license to do business in the state and had more Texas policy holders than its roughly 22,000 Floridian policy holders. Weston was the fifth Florida property insurer this year to be dissolved, according to Florida state regulators.
Earlier this month, the Florida Office of Insurance Regulation filed notice with Florida’s Department of Financial Services stating that Weston was “insolvent or about to become insolvent,” and DFS should begin delinquency proceedings.
It issued the filing one day after Demotech, a financial rating firm, announced it had withdrawn Weston’s financial stability rating. Last month, Weston’s board of directors agreed to receivership after the company reported more than $94 million in net losses over the past two years and a spike in reinsurance costs, the Insurance Journal reported.
The five companies that folded this year did so after the state legislature and Gov. Ron DeSantis implemented reforms to stabilize Florida’s property insurance market. The reforms are expected to lead to pro-consumer measures and reduce rates over time, but additional reforms are expected next year.
Of Weston’s more than 30,000 Texas-based insurance customers, over 23,000 live in TWIA’s Designated Catastrophe Area along the Gulf Coast. The area stretches from Jefferson County in the northeast region along the coast to Cameron County at the southern tip of Texas.
“The State of Texas is working to ensure Texas residents along the Gulf Coast are receiving critical wind and hail insurance coverage throughout hurricane season,” Gov. Greg Abbott said.
“These Texas customers are not at fault and have already taken the steps necessary to insure their homes and property,” he added. “We must ensure that Texans, especially in our coastal regions, are able to be fully prepared and covered for any weather events with the potential to impact their lives and livelihoods.”
The emergency rule helps provide immediate and more affordable windstorm coverage for thousands of coastal residents, state Rep. Mayes Middleton said. It provides Weston policyholders who qualify for insurance coverage through TWIA with several benefits including $0 initial payment, additional time to apply for coverage, and coverage even if a storm approaches.
The emergency rule authorizes TWIA to set up a special payment plan starting Aug. 31, which gives policyholders flexibility in paying premiums and enables them to pay $0 as an initial payment. The $0 payment provides coverage for the first three months. Afterwards, the premium will be due in equal monthly amounts.
The rule also allows customers to apply for TWIA coverage by Nov. 6, 2022, although they will get coverage starting Sept. 7, when the Weston policies ends.
Texans will also be able to receive coverage even if a storm is detected in the Gulf of Mexico, according to the emergency rule. Normally, residents can’t purchase a TWIA policy if a hurricane is heading into the Gulf of Mexico.
Residents will be covered for wind and hail damage as long as they purchase coverage by Nov. 6.
“Our coastal residents deserve nothing less than the actions taken today,” state Sen. Juan “Chuy” Hinojosa said. Hinojosa, a Democrat, thanked Abbott and TDI Insurance Commissioner Cassie Brown for taking swift action to protect Texans living along the Gulf. “This emergency rule gives our constituents, who will lose coverage through no action of their own, more time to get insured and the flexibility needed to make payments,” he said.
TDI has published information online including guidance for Weston policyholders and encourages those with questions to call 800-252-3439.
