A recent rate hike approved by Texas' windstorm insurer of last resort underscores the urgency of balancing the financial needs of both insurers and policyholders following damaging storms like Hurricane Beryl in an already strained property insurance market, experts say.
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Alan Rubin, a principal at Blank Rome LLP and a co-leader of its Severe Weather Emergency Recovery Team, told Law360 that the burden of mitigation must be spread out among property owners, insurers and legislatures.
"Everyone's got to participate in trying to mitigate the damage from weather-related disasters," he said, adding that actions must be taken proactively, rather than retroactively.
Catastrophe bonds would help last-resort insurers raise money, Rubin said, and incremental increases would go a long way in building up reserves while minimizing the burden placed on policyholders.
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"Texas Windstorm Insurer Strikes Balance with Rate Hike," by Hope Patti was published in Law360 Insurance Authority on August 16, 2024.
