Relating to assessment of a premium surcharge by the Texas Windstorm Insurance Association for coverage of improvements to certain commercial structures.
The bill establishes that any applicant or policyholder who seeks coverage under these provisions will incur an additional premium surcharge. The proposed surcharge is to be set by the insurance commissioner and will be at least ten percent of what would have been assessed if the structure had been compliant with regulations. This surcharge is separate from standard premiums and is not subject to taxes or commissions, indicating a potential revenue stream for the state through the catastrophe reserve trust fund.
House Bill 2135 aims to amend the assessment of a premium surcharge by the Texas Windstorm Insurance Association for insurance coverage relating to improvements made on certain commercial structures. Specifically, it allows for coverage to be obtained even if the commercial structure has not been inspected or certified as compliant with the plan of operation set out by the association. This could potentially open the door for insurers to cover higher-risk properties that may not meet existing compliance standards.
One notable point of contention could revolve around the implications for compliance in construction standards. Opponents may argue that allowing coverage for noncompliant structures increases the risk for the insurance pool, potentially leading to higher costs across the board for compliant properties. Supporters may assert that this bill provides crucial coverage options for businesses and property owners who have faced obstacles in meeting strict compliance requirements, thereby facilitating economic activity.
If enacted, this bill would take effect on September 1, 2009, and would apply to policies issued after that date. It may lead to a shift in how insurance coverage for commercial properties is assessed, promoting accessibility to coverage while raising questions about compliance and accountability within the insurance market. The long-term effects on property insurance dynamics in Texas could be significant, establishing a precedent for similar legislation in the future.