Texas Insurance Commissioner Cassie Brown has denied a proposed 10% insurance rate increase for homeowners and business owners along the Gulf Coast.

Insurance Rate Hike Rejected by Texas Regulator

The rate hike was sought by the Texas Windstorm Insurance Association (TWIA), the state’s insurer of last resort, which provides coverage for wind and hail damage to properties in the coastal regions. In her ruling on Monday, Brown stated that such an increase would be “unjust and unfair” due to the financial burden it would place on coastal residents, many of whom are still recovering from previous storm damage. Brown’s decision came after widespread opposition from school district officials, business groups, and property owners, who voiced concerns in public meetings about the affordability of the rate increase. “The coast won,” said State Rep. Todd Hunter, a Republican from Corpus Christi, who had led efforts to block the increase.

Texas Faces Rising Insurance Costs

Texas property owners are already dealing with some of the highest insurance premiums in the country. According to a recent S&P Global analysis, homeowners’ insurance rates in Texas rose more than 23% last year, surpassing increases in every other state. This spike is largely driven by extreme weather events, such as hurricanes and severe storms, as well as rising property values.

In recent years, many coastal property owners have turned to TWIA for wind and hail coverage as private insurers have become less willing to provide coverage in the region. TWIA serves as a pool of private property and casualty insurers that provide policies to properties in Texas’ 14 coastal counties, as well as a portion of Harris County, which includes Houston, the state’s most populous urban area.

TWIA had argued that it needed the additional revenue from the proposed rate hike to cover a growing base of policyholders and meet the rising costs of construction and labor for repairing storm damage. However, TWIA officials acknowledged that the 10% increase would not fully address these financial needs. The association’s board of directors approved the proposed hike in August, citing the heavy financial toll of Hurricane Beryl, which caused an estimated $2.5 billion in damage in Texas.

Concerns About Coastal Burdens

In her decision, Commissioner Brown emphasized the significant financial challenges already faced by Gulf Coast property owners, many of whom are still recovering from Hurricane Beryl. A rate increase, she stated, would only “exacerbate the burdens” on these residents. As of this month, TWIA has paid out nearly $259 million in claims related to Beryl, and the association expects to deplete its $450 million reserve fund to meet the remaining claims.

Looking ahead, state lawmakers are expected to address the issue of rising insurance costs when the Texas legislature reconvenes next year. Lt. Gov. Dan Patrick and House Speaker Dade Phelan have indicated that insurance reform will be a key priority. Aaron Taylor, TWIA’s senior legislative and external affairs specialist, expressed optimism about working with lawmakers to ensure the association has the financial resources needed to support its policyholders.