HOUSTON - Allstate has announced that it will drop windstorm coverage for 65,000 policyholders in Texas coastal counties to help limit the company's exposure to hurricane losses.

The company says it intends to move the policies into the Texas Windstorm Insurance Association, an insurer of last resort for residential and commercial property owners.

"Allstate hasn't utilized the option as much as our competitors have, but in the face of increasing risks, we feel we need to utilize this option," Allstate spokesman Joe McCormick said.

Allstate, the state's second-largest insurer, will stop renewing windstorm coverage in coastal counties and part of Harris County starting Sept. 15. About 15,000 Allstate customers already have windstorm coverage with the state pool, the company said.

In the wake of last year's hurricanes, other companies have notified the Texas Department of Insurance they are cutting back or dropping windstorm coverage along the coast. The companies include American National Property and Casualty, Texas Farm Bureau Insurance Co., Horace Mann Insurance, Beacon Insurance and Middle States Insurance Co.

State Farm and Farmers still sell some windstorm coverage along the coast, though they also have customers insured by the wind pool, spokeswomen for the companies said.

The average homeowner covered by the pool pays $787 a year in premiums. Homes must be inspected before receiving coverage, and Allstate said it will send notices to policyholders 90 days before their renewal date to give them time to set up inspections.

It should be able to handle the day-to-day costs of the new load, but claims following a hurricane could stretch the pool's resources, said Jim Oliver, chief executive officer of the windstorm association.

The windstorm pool has $1.3 billion in funding based on assessments on insurers, reinsurance and past premiums, he said. Losses beyond that would be covered by insurance companies, which would get credits on state taxes to offset additional payments.

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