I’ve written many times about the ridiculous and unfair system in Texas where the insurance industry controls the regulatory department that sets the rules for insurance rates. The not-so-unexpected results of such a system include Texas leading the nation in homeowner insurance rates year after year. And even worse, the homeowner policies being written today offer far less coverage than past policies. There are more exclusions in current policies than ever before. Here are excerpts from a recent article in the Dallas Morning News about homeowner rates.
Texas homeowners paid the most expensive insurance premiums in the country for the second year in a row, although average premiums in the state have not been increasing as sharply as in other states, according to new figures from the National Association of Insurance Commissioners.
The average annual cost of the most commonly sold policy in Texas was $1,511, which is well above the national average of $880 and about $50 more than in the state with the second-highest rates, Florida. Eight states had average premiums above $1,000 a year, and some of those have seen dramatic increases in recent years.
Consumer groups warned that Texas homeowners should not expect any relief soon, while industry representatives noted that premiums in the state are not rising as fast as in other states.
“For as long as anyone can remember, Texas has had among the highest insurance rates in the nation,” said Alex Winslow of Texas Watch, a consumer group active in insurance issues.
“The flip side is that coverage for most homeowners is getting slashed while their rates keep going up. With higher deductibles, expanded exclusions and a growing number of junk policies, Texas policyholders are being forced to pay more for less,” he said. “It’s like being forced to pay Cadillac prices and getting stuck with a clunker.”
Winslow said the situation would not improve until the Legislature beefs up laws regulating insurers and the commissioner of insurance “gets tough” with companies.
Mark Hanna of the Insurance Council of Texas said the premiums listed in the study reflect how catastrophic weather events can affect homeowner rates. He noted that several states with higher premiums were along the hurricane-prone Gulf Coast or in areas that experience a large number of destructive storms.