TWIA Policyholders Still Waiting for Payment After Hurricane Ike

Several school districts, cities and other government agencies are still waiting for a Texas insurer to pay nearly $60 million in claims from Hurricane Ike, adding to more insurance worries in the wake of Hurricane Harvey.

The Texas Windstorm Insurance Association provides insurance covering only wind and hail for nearly 235,000 policyholders in a 14-county area of coastal Texas. It doesn’t cover claims arising from flooding, such as that caused by Harvey, the Houston Chronicle reported.

Texas City Independent School District leads the list of nine entities still seeking funds from the insurer with more than $17 million in outstanding Ike claims. Dickinson ISD is second with $10.5 million.

Officials with the entities said they have little faith the insurer will pay the claims without more legal battles.

“It’s scary,” said Vicki Mims, Dickinson superintendent whose community was also hit by Harvey. “As a school district, we have some resources to use. …If you’re a homeowner, what do you do? Fight TWIA for 10 years?”

Five of the entities still seeking funds for Ike are trying to work through an appraisal process to figure out how much the insurer should pay. Dickinson ISD filed a lawsuit and has battled a legal appeal in an effort to recover the losses.

The pending Ike claims are outliers and don’t indicate any problems for Harvey claims, said Jennifer Armstrong, a spokeswoman for the insurer.

Claims through the insurer have become more complicated since Ike struck Texas in 2008. State lawmakers passed a series of laws in 2011 making an appraisal process the only avenue through which policyholders can dispute claims and capping the amount of damages if a court finds TWIA guilty of wrongdoing. Policyholders should be concerned because the new appraisal process is difficult to maneuver and because the insurer is less liable for damages if they do something wrong, said Wade Wendell of Texas Watch, a policyholder advocacy group.

“They’re rigging the process,” Wendell said. “These changes further incentivize TWIA to test to see if policyholders can afford a lawyer or if they have the stomach to fight them in court for years.”