Windstorm insurance for 53,620 secondary homes along the Texas coast will stay in place after a state committee voted Tuesday, Sept. 1, to reject a proposal that would have phased out coverage. The decision protects thousands of Galveston County property owners, including League City residents with rental or vacation homes on Galveston Island, Bolivar Peninsula and Crystal Beach.

The Texas Windstorm Insurance Association's (TWIA) Legislative and External Affairs Committee voted 2-1 to kill the measure, The Galveston County Daily News first reported. The proposal will not go before the full TWIA board at its Oct. 8 meeting.

The plan, introduced by TWIA board member and insurance industry representative John Todd, would have stopped new windstorm policies for non-owner-occupied homes and phased out existing coverage over five years. TWIA is the insurer of last resort for wind and hail damage in designated coastal areas where private coverage is unavailable.

Galveston County stands to lose the most under such a change. The county holds 18,178 secondary-home TWIA policies, nearly 34% of the association's secondary-home policies statewide.

Of the 300 written comments TWIA received by the morning of Sept. 1, only four supported the proposal.

Board member Terrilyn Tarlton Shannon, who represents Galveston County, moved to reject the measure. She said tenants in rental homes would lose coverage through no fault of their own. Committee chair Etti Baranoff, the non-seacoast representative, also voted against it.

State Rep. Terri Leo Wilson spoke against the proposal during public comment, warning it could disrupt mortgage markets and hurt property values because lenders may refuse to finance homes without windstorm coverage. "This measure would be absolutely devastating, especially to the Corpus Christi and Galveston areas, where 60% of our homes are not owner-occupied homes," Leo Wilson said.

TWIA staff estimated that excluding secondary homes could reduce the association's probable maximum loss by about $910 million and cut net reinsurance costs from $197 million to roughly $135 million. Todd said those savings would ease long-term rate pressure on remaining policyholders.

Sally Bakko, Galveston's director of policy and governmental relations, called the proposal's potential impact on the local economy "crippling." She noted Galveston draws more than 9 million tourists a year, supporting more than 33% of island jobs.

Even if the proposal had cleared the committee, it would have needed full board approval, inclusion in TWIA's 2026 Biennial Report to the Texas Legislature and passage of a new state law before eligibility rules could change.

The committee forwarded five other topics to the full board for the biennial report: multidistrict litigation, FORTIFIED home construction, changes to TWIA's catastrophe-funding structure, its depopulation program and tort reform. The full TWIA board meets Oct. 8.