Texas Senate Bill SB697

Texas 2009 - 81st Regular

Caption

Relating to coverage under certain residential property insurance policies for losses incurred because of storm surges.

Impact

If enacted, the bill would alter existing insurance practices, compelling insurers to revise their policies to accommodate storm surge events. This shift could lead to increased availability of insurance coverage for homeowners living in storm-prone areas and promote a better response to natural disasters. However, it may also result in higher premiums as insurers adjust to manage the increased risk associated with storm surge claims. Homeowners could see more reliable support from their insurance policies when faced with damage caused by severe weather, promoting quicker recovery and reconstruction efforts.

Summary

SB697 aims to amend the Texas Insurance Code to require insurers to provide coverage under residential property insurance policies for losses resulting from storm surges. The bill seeks to ensure that homeowners are not disadvantaged by insurance policies that exclude storm surge-related damages, which are often significant in coastal areas during severe weather events. By mandating coverage, the legislation intends to provide a safety net for residents affected by storm-related incidents, thus enhancing disaster resilience in vulnerable communities.

Contention

Notably, the bill may face opposition from insurance companies concerned about the financial implications of covering storm surge damages, especially if such events lead to substantial claims. Insurers may argue that expanding coverage could lead to increased costs that are unsustainable, potentially leading to fewer available options for homeowners or higher overall rates. Proponents of the bill, however, argue that ensuring coverage is a necessary step to safeguard residents and encourage responsible pricing of policies that accurately reflect the risks inherent to living in coastal regions.