Nearly 4,000 Cameron County homes could lose state-backed windstorm coverage

Thousands of Cameron County second-home owners could be forced to find windstorm insurance elsewhere under a proposal being considered by Texas’ state-backed insurer of last resort.

The Texas Windstorm Insurance Association, or TWIA, currently provides windstorm coverage for 3,964 second homes in Cameron County, the fifth-highest number among the coastal counties it serves. Another 187 are covered in neighboring Willacy County.

Now, TWIA is considering asking state lawmakers to restrict its residential coverage to owner-occupied primary homes, which would make second homes ineligible. The proposal is scheduled for discussion Sept. 1 as the association develops recommendations for the Texas Legislature.

The financial incentive is significant. 

TWIA estimates dropping second homes could save about $60 million a year in reinsurance costs and reduce the amount it needs to prepare for catastrophic storms by 21%.

South Padre Island Mayor Patrick McNulty called attention to the proposal Wednesday, encouraging people who own second homes on the Island and elsewhere along the Texas coast to follow the issue and submit public comments ahead of the meeting.

“Please forward to anyone you know who may have a second home on our Island or the Texas Coast,” he said in a social media post.

What is TWIA?

TWIA provides windstorm and hail insurance to property owners in designated coastal areas who cannot obtain that coverage through the regular private insurance market.

That makes it an important insurer in hurricane-prone communities along the Texas coast, including Cameron and Willacy counties.

The proposal would narrow who could use that system for residential coverage. Instead of covering both primary and secondary residences that meet its requirements, TWIA would be limited to owner-occupied homesteads.

Changing that eligibility would require action by the Texas Legislature. The Sept. 1 discussion is part of the process of deciding whether TWIA should recommend such a change to lawmakers. 

The proposal was submitted by a TWIA board member and was previously considered by the association’s Legislative and External Affairs Committee in June.

Second homes represent $19 billion in coverage

The potential change would extend well beyond the Rio Grande Valley.

Statewide, TWIA insured 53,620 secondary homes as of March 31, representing 19% of its residential policies. Together, those properties account for about $19 billion in insured exposure.

The largest concentrations are farther up the coast. Galveston County has 18,178 second homes insured through TWIA, followed by Nueces County with 12,661 and Brazoria County with 5,245. Nearly 60% of all second-home policies are concentrated in Galveston and Nueces counties.

Cameron County ranks fifth, with an average building coverage limit of $204,087 for those properties. The 187 second homes covered in Willacy County have an average limit of $310,160.

Why TWIA is considering the change

Removing second homes from TWIA’s books would substantially reduce the financial risk the association carries into hurricane season.

At the committee’s request, catastrophe modeling firm Aon calculated what TWIA’s risk would look like without secondary residences.

The analysis found TWIA’s probable maximum loss — an estimate used to determine how much money it needs available for a major storm — would fall from $4.305 billion to $3.395 billion, a 21% reduction.

The association’s annual reinsurance expense could also drop from $197 million to roughly $135 million to $140 million.

That translates into savings of about $60 million, or 30%, according to TWIA.

TWIA does not currently charge a different rate simply because a property is a second home. Secondary residences, however, are not eligible for Additional Living Expense coverage, which can help primary homeowners pay temporary living costs if their home becomes uninhabitable after a covered loss.

What happens next

The proposal will be discussed by TWIA’s Legislative and External Affairs Committee on Sept. 1.

The committee is working on recommendations for TWIA’s 2026 biennial report to state leaders. Any recommendations would first go to the full TWIA Board of Directors for consideration before the report is submitted to the governor, lieutenant governor, House speaker and relevant legislative committees.

For Cameron County second-home owners, that means nothing changes immediately. But if TWIA ultimately recommends restricting coverage and Texas lawmakers approve the change, thousands of coastal property owners would have to look elsewhere for windstorm insurance.