Houston members...I don't think Harris County is included, but Galveston County is. However, your deductibles for windstorm will still go up.
Allstate drops wind insurance on coast
By: DAN WALLACH, The Enterprise
05/20/2006
Allstate Insurance Co. is ending windstorm coverage for Texas coastal counties, including Jefferson County, beginning Sept. 15, an Allstate spokesman said today.
That means Allstate policyholders must arrange for continued coverage against windstorm losses through the Texas Windstorm Insurance Association, a state pool created by the Texas Legislature in 1971 to provide such coverage.
Allstate spokesman Joe McCormick said the company would send notices to its policyholders 90 days in advance of their annual renewal to give them plenty of time to arrange coverage.
"Agents will be walking them through the process," he said. "It's not unlike writing a normal homeowner's policy."
Allstate took the step because of losses associated with Hurricane Rita, which struck Texas and Louisiana Sept. 24. The company lost $1 billion in claims paid, and Texas policyholders accounted for $500 million of that loss, McCormick said.
The company's decision to end windstorm coverage affects only Texas coastal county policyholders. Allstate's customers in counties that are at least once county inland from the coast are not affected, but their deductibles for windstorm will rise to 2 percent from 1 percent, McCormick said.
Allstate customers losing windstorm coverage will see their premiums reduced 40 percent to 70 percent - the amount represented by windstorm coverage, McCormick said.
Jim Oliver, general manager of the Texas Windstorm Insurance Association, said the organization is able to absorb the extra business and said gaps in coverage are not likely.
"A property has to be insurable, obviously," Oliver said. "We don't want to be insuring property where it's impossible to tell new damage from old damage. But I don't think there will be too many. There will be a few that will struggle to get coverage."
The biggest change for most policyholders is they will have two policies instead of one, he said.
"An agent would go to our Web application, get a check from the insured, and send the application to us," Oliver said.
The windstorm association will inspect properties older than 15 years, but will not withhold coverage pending inspection.
"We don't generally cancel anyone during hurricane season except for nonpayment of premiums," Oliver said.
McCormick said Allstate chose to go through with its withdrawal from windstorm coverage now instead of waiting for the end of this year's hurricane season - which begins June 1 and lasts through Nov. 30 - because the change affects policyholders at their annual renewals.
"So it would be either this year or next year," he said.
The windstorm association has asked the state insurance commissioner for a rate increase - 19 percent for residential coverage and 24 percent for commercial coverage. The association also asked for a surcharge on homes it has not yet inspected, said Jerry Hagins, a spokesman with the Texas Department of Insurance.
The insurance commissioner is expected to decide on the requests next Monday or Tuesday, Hagins said.
Allstate is the only major insurer in the state to announce its complete withdrawal from windstorm coverage for coastal counties, Hagins said. Several smaller companies already had dropped such coverage, he said.
The change affects about 60,000 policyholders in the 14 coastal counties.
The Texas Windstorm Insurance Association covered about 8 percent of claimants in Jefferson County for losses resulting from Hurricane Rita. The losses amounted to $160 million, Oliver said.
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