Relating to Texas Windstorm Insurance Association underwriting standards for structures that meet certain construction standards.
Impact
The bill, if passed, could significantly impact the insurance and construction sectors in Texas, particularly in coastal areas. It would enable TWIA to insure structures that may not have the conventional certification but meet the fortified construction standards recognized by the Insurance Institute for Business and Home Safety. This could facilitate increased insurance availability for homeowners and businesses, particularly those in catastrophe-prone areas, ultimately aiding in risk management and disaster recovery efforts in these communities.
Summary
House Bill 2841 is designed to amend the underwriting standards of the Texas Windstorm Insurance Association (TWIA) by incorporating provisions for structures that meet certain construction standards. Specifically, the bill allows for certification of buildings adhering to fortified home, multifamily, or commercial construction standards as an alternative to existing compliance certificates. This change aims to encourage higher construction standards and bolster the overall safety of structures in areas prone to windstorms and disasters, thereby aligning insurance practices with enhanced building codes.
Sentiment
General sentiment regarding HB 2841 appears to be supportive among stakeholders in the construction and insurance industries. Proponents argue that the bill encourages better construction practices and subsequently lower insurance claims and losses during windstorm events. However, some concerns have been raised about oversight and ensuring that the standards are uniformly applied to prevent any decrease in building safety quality. The sentiment reflects a nuanced understanding of the balance between promoting economic activity and ensuring public safety.
Contention
While the bill has garnered support for its potential benefits, some points of contention may arise, particularly regarding the adequacy of the proposed construction standards. Critics might question whether the alternative certification sufficiently protects policyholders and the integrity of the insurance pool. Furthermore, the bill mandates that the changes only apply to new structures going forward, thus potentially leaving existing buildings under previous standards, which raises questions about their safety and insurance status in the interim.
Texas Constitutional Statutes Affected
Insurance Code
Chapter 2210. Texas Windstorm Insurance Association
Relating to funding of excess losses and operating expenses of the Texas Windstorm Insurance Association; authorizing an assessment; authorizing a surcharge.
Relating to funding of excess losses and operating expenses of the Texas Windstorm Insurance Association; authorizing an assessment, a surcharge, and an infrastructure grant.