Senator Eliot Shapleigh - El Paso, Texas

State officials say they have $2.1 billion from premiums paid to the emergency fund, but claims from Ike could top $10 billion.

As insurance adjusters began tallying the damage inflicted by Hurricane Ike, state officials braced to see whether the losses will ripple through a taxpayer-backed insurance fund.

State Insurance Commissioner Mike Geeslin warned Sunday against relying on damage estimates based on computer models, saying that only adjusters on the ground could accurately assess the losses.

"Anything we know now is from secondhand reports," said Geeslin, who was being briefed twice daily by insurance experts.

That didn't keep state officials from anticipating what might happen to the Texas Windstorm Insurance Association, more commonly called the state windpool.

In the aftermath of hurricanes Katrina and Rita, private insurers drastically cut back on hurricane coverage along the Gulf Coast, prompting coastal residents to flock to the windpool in record numbers. As a public-private partnership that provides "last resort" coverage to coastal residents, the windpool has long relied on state money as a backstop for policy payouts.

Now the windpool's liabilities are nearly triple what they were when Katrina hit three years ago. It has about $2.1 billion from insurance premiums to cover Ike-related damage, estimated state Rep. John Smithee, R-Amarillo, chairman of the House Insurance Committee.

"I'd be shocked if it didn't exceed the $2.1 billion," Smithee said, adding that computer modeling predicts total insurance claims of $10 billion to $12 billion.

Under the windpool's financing scheme, insurance companies would have to pay upfront to cover any deficit. But taxpayers ultimately would pay the tab through tax breaks to repay the companies.

Jim Oliver, the chief executive for the state windpool, said the fund had $29 billion of "exposure" in four counties: Galveston, Brazoria, Chambers and Jefferson.

"This is going to have a big impact on the state," said Oliver, adding that it might take weeks to get a solid estimate of the losses.

Smithee said the nature of Ike might lessen its impact on the windpool.

"The winds weren't what we modeled as a worst-case scenario," Smithee said. "The water surge was worse."

Ike was a strong Category 2, with top winds of about 110 mph. The coastal surge was 15 feet above sea level in some places.

Smithee said many Texans carry both federal flood insurance and the windpool coverage. In those instances, the damage can be shared between the two public funds.

"When a structure is destroyed," he said, "it's hard to tell whether it's by water or wind."

Texans who had windstorm insurance only may have a harder time getting their losses fully covered, Smithee said.

Geeslin urged Texans to file damage claims as soon as it's practical.

"If they don't hear from an adjuster in a couple of days — max — then they should call our consumer assistance phone line," he said.

The number is 800-252-3439.