Texas Windstorm Insurance Association (TWIA)

The Texas Windstorm Insurance Association (TWIA) is the insurer of last resort set up by the state of Texas to cover wind and hail along the Gulf Coast. It writes the risk where the private market no longer does. September 13, 2008: Ike made landfall at Galveston. For TWIA the bill ran into the billions and its reserve fund was drained. The litigation that followed weighed so heavily that a 2011 reform went on to tighten claims procedures and lawsuits. The association dates back to 1971. It was set up under another name after Hurricane Celia, to write wind and hail in fourteen coastal counties and part of Harris County. Homeowners buy a policy that excludes wind from a private carrier, and the wind cover from TWIA. The building has to meet code, and an inspection certificate has to show it. Funding stacks up in layers, and each layer bills someone different. First premiums and the catastrophe reserve trust fund. Then public securities repaid by TWIA, then by surcharges or by assessments on Texas insurers. The split depends on the tranche and on the version of the statute in force, since the legislature has rewritten it several times. Above that sit reinsurance and cat bonds issued through its vehicle Alamo Re, which trigger on TWIA's own losses rather than on a parameter. For years the statute required the whole tower to withstand a 1-in-100-year season. Since House Bill (HB) 3689 in 2025, the floor is a 1-in-50-year season, a 4.3 billion dollar probable maximum loss for the 2026 season. Every year the board votes on a rate increase that coastal lawmakers push back on. The pool grows whenever the private market pulls back. That concentrates coastal risk in a structure whose top layer, in an extreme season, gets refinanced after the fact.