June 14, 2011
By: Bruce Berry
In an effort to bolster its reserves ahead of a potentially busy hurricane season - one that could lead to a high number of home insurance claims for Gulf residents - Texas' insurer of last resort brokered a deal for more than $600 million in reinsurance.
The Texas Windstorm Insurance Association provides homeowners in 14 Texas counties with coverage for wind and hail damage when they are unable to purchase it from their own homeowners insurance company. The organization announced last week it has purchased $636 million in reinsurance ahead of this year's Atlantic hurricane season, a sum it says will cover any losses over the $1.6 billion in funds that the company has available.
Insurance premiums paid in 2011 and 2012 will cover the cost of the reinsurance, which will be in effect from June 1, 2011 to May 31, 2012. The TWIA board of directors voted in favor of the purchase at its May 20 meeting, the organization said in a release.
Homeowners around the Atlantic coast are preparing for what forecasters said could be an active hurricane season. The most recent projection from Colorado State University says there's a 47 percent chance at least one hurricane will touch land along the Gulf Coast this year, up from the average 30 percent chance.
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- Thousands of St. Louis insurance claims cite recent hail damage May 22, 2012
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