The Texas Windstorm Insurance Agency (TWIA) has decided to increase its reinsurance budget by 22% for 2025. This decision was made during a recent board meeting. Reinsurance helps insurance companies reduce their risk by sharing it with other firms. The move comes as Texas faces more frequent and severe storms.
TWIA provides wind and hail coverage for coastal properties in Texas. Many homes and businesses in these areas rely on TWIA for protection. The agency buys reinsurance every year to make sure it can pay claims after big storms. With climate change increasing hurricane risks, the board believes higher reinsurance spending is necessary.
The new budget will allow TWIA to purchase more reinsurance coverage. This means the agency will be better prepared for major disasters. Without enough reinsurance, TWIA might struggle to pay all claims after a catastrophic storm. The decision follows recent hurricanes like Harvey and Ike, which caused billions in damage.
Insurance experts say rising reinsurance costs are a global trend. Extreme weather events have made reinsurance more expensive. TWIA’s increase reflects this challenge. However, the board says the extra cost is worth it to protect Texas coastal residents.
The 22% budget hike will be funded through premiums and other sources. TWIA assures policyholders that rates will not rise sharply because of this change. The agency will continue working to keep coverage affordable while strengthening its financial safety net.
This decision highlights the growing risks from climate change. As storms become stronger, insurance and reinsurance markets must adapt. TWIA’s move shows how serious the threat is for coastal communities. Other states with similar risks may follow Texas’s example in boosting reinsurance budgets.
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