The Texas Windstorm Insurance Association will vote on whether to raise the windstorm insurance rate by 10% at a board meeting next Tuesday, Aug. 6, and members of the United Corpus Christi Chamber of Commerce, along with State Rep. Todd Hunter and Coastal Bend school district and economic development officials have come together in opposition.
The group members held a news conference Monday morning at the Corpus Christi Regional Transportation Authority building. Many in the group wore pins or displayed signs reading “No Rate Hike” and “Don’t Kill the Texas Coast” and spoke about why rates on both residential and commercial properties must not be raised.
For residents and property owners in the wind and storm-buffeted regions of the Coastal Bend — particularly the 14 counties that lie within certain portions of the seacoast territory of Texas that are designated Catastrophe Zones by the Texas Department of Insurance — TWIA insurance is an option for those who cannot obtain insurance in the private market.
However, the combination of property taxes, windstorm insurance and flood insurance are resulting in an unfair burden for school districts and residential taxpayers, say opponents of the rate hike.
“In the 14 counties, we generally have to pay for three insurance policies, whereas the rest of the state only pays for one,” Hunter said. “In 2017, we hadn’t had a hurricane for 40 years, yet we were paying high, high rates, and so every year, the insurance industry in TWIA tries to raise the rates on the residents and the businesses, and now the schools are having to pay."
He stressed the impact of higher tax rates on school districts that share their local tax revenue with other school districts through recaptured funds that the school finance system redistributes to assist with financing public education for all districts, as mandated by the Texas Education Code.
These schools will suffer with a 10% insurance rate hike due to having to send a large portion of money to the state to pay for windstorm insurance, Hunter said.
The state representative implored people to contact TWIA to voice their opposition to the rate hike by emailing publiccomment@TWIA.org and also to alert friends and family to the possibility of the increase.
“We are going to fight it—we’re going to continue to fight—until we get an equal, fair plan for the whole state, and the coast shouldn’t be stepped on anymore,” he said.
The amount that rates will be raised won’t be determined until the vote is taken on Tuesday in Galveston, yet TWIA is arguing it should be as high as 30% to 40%, he said.
The TWIA Actuarial and Underwriting Committee met on July 15 and voted to recommend that the TWIA Board of Directors approve the rate filing to increase rates for both 2025 residential and commercial policies, according to information on their website.
The recommendation, made on a 5 to 1 vote, followed the committee’s review of 2024 Rate Adequacy Analysis prepared by staff members on the committee that indicated that TWIA rates were inadequate by 38% for residential coverage and 45% for commercial coverage.
Committee members also heard public comment from stakeholders, including elected officials and other coastal community members.
In response, the opponents who gathered at CCRTA Monday are assembling their own legislative delegation, which includes representatives from local school districts that will be negatively impacted by the rate hikes, who will attend the meeting to voice their opposition to the rate hikes and urge the Texas legislature to forego a rate hike and instead focus on coming up with a comprehensive solution when the legislature reconvenes next session in January 2025.
One idea they support is a statewide catastrophe plan in which cost would be shared to provide coverage in the event of future natural disasters, with hopes that the Texas Legislature will take the lead on it in the next session.
Al Arreola, chief executive officer of the United Corpus Christi Chamber of Commerce, said that the representatives were successful last year at stopping a tax rate hike at the TWIA level, and that even if the vote to increase the rate passes on Tuesday, it won’t be implemented until January, providing an opportunity to have more objective discussions and look at policies from a holistic perspective.
“To look at windstorms through such a narrow lens when there are fires in the Panhandle, tornadoes up in East Texas—there are significant events that happen across the state, so that effectively the burden on us with the rates is unfair,” he said. “These are challenging times to do business right now across the country with inflation. The proposed rate increase is a significant burden to anyone trying to do business or start a business.”
Among the representatives traveling to Galveston will be those from Flour Bluff ISD.
The school’s location along the coast equates to much higher insurance rates than schools located in inland cities such as Floresville, said Superintendent Chris Steinbruck.
The difference is millions of dollars in the cost of insurance premiums each year.
“If you’re a little bit further inland, you’re paying 60% to 70% less for insurance,” he said. “Our property casual premium is $3.2 million with a 5% deductible, which comes out to $573 per student. Floresville pays an $880,000 premium with a 1.1% deductible, so a school of the same size gets much better coverage.”
“Most fair-minded people are understanding that this is not fair for coastal schools or coastal communities,” he said.
During a budget workshop on July 16, Flour Bluff ISD representatives met to address the impact of ultra-high premiums on delivering quality, affordable education to students in absence of any significant increases in funding for public education since 2019.
“The last thing we want to see are any hikes,” he said. “There need to be further conversations about what’s fair for everyone, to continue conversations with Rep. Hunter and state Sen. Morgan LaMantia.”
Other news conference attendees voiced their support for the meeting discussion, with the emphasis placed on how to address the impacts felt by school districts.
"The calendar provides an opportunity for the state Legislature to look at this issue and think about what a sustainable plan might be," said Jeffrey Sjostrom, president of the Aransas County Partnership Economic Development Corp.
"Rockport-Fulton ISD continues to pay money back to the state in the form of recapture, so for the components that make up our community, that hits hard," he said. "To double up on that by increasing their tax rates, it gets harder to attract quality teachers and personnel for the district."
He said that issue has been ongoing for 33 years, and that he is thankful a regional leadership team has formed to voice their concerns.
More: Coastal Bend businesses, officials protest potential Texas Windstorm Insurance rate hike
More: 5% rate increase for TWIA customers to take effect Jan. 1 over civic leaders' objections
More: Hurricane season 2024: What Coastal Benders need to know
This article originally appeared on Corpus Christi Caller Times: Coastal Bend organizations oppose proposed 10% rate hike for windstorm insurance
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