Keeping up with rates From the cover
How it works
The background
Home insurance rate changes
from 2020 to 2023
Insurance companies have reported they’re facing risks, such as natural disasters and the lin- gering impact of the pandemic on material costs. “As far as aordability, we are seeing that the premiums for insurance are increasing quite a bit,” Bumpas said. “My home ooded during Harvey. ... We replaced every single interior door in the house with the door jamb. At that time, one door [and] one door jamb was $57,” Bumpas said. “Five years later, I went to the same supplier, picked up just the door—not the door jamb—and it was $109.” Bumpas said insurance companies are having to increase the replacement cost for homes, which drives up the carrier’s premium. Carriers have increased the premiums of their policyholders nationwide; however, the Houston area has experienced dramatic increases as ana- lysts deem the area “high risk,” said Laura Crain, president of Crain Insurance Group. Like its predecessors such as Harvey and Winter Storm Uri, Hurricane Beryl caused billions of dol- lars in damage in July 2024, according to property analytics ¢rm CoreLogic. In December, the U.S. Senate Committee on the Budget published nonrenewal rates, con¢rming areas most vulnerable to climate-related risks have the highest nonrenewal rates and the most signi¢cant rate increases. While Harris County had a lower nonrenewal rate than neighboring coastal counties, its nonre- newal rate was higher than those further inland to the north, according to the report.
Coulter, who’s been a Kingwood resident since 2007, said she had a new roof put on her home in December and still lost out on her insurance policy renewal. She said she’s had to nd dierent insurance carriers because others stopped writing policies. “We’re starting to get down to very limited options as far as carriers,” Coulter said. “If we get hit by anything this hurricane season, then I think we’re in a real jam.” Since 2003, Texas has used a le-and-use system for home insurance, which allows insurance companies to issue higher rates without state approval as long as they notify the state, according to the Texas Department of Insurance. “They could just slide an envelope across the desk at [the TDI] and tell them, ‘This is what we’re charging,’ and then put that into practice immediately,” said Ware Wendell, executive director of Texas Watch, which is an organization that monitors insurance practices in the state. It’s incumbent upon the TDI to challenge hikes that don’t comply with state law, Wendell said. Of the more than 2,300 rate lings the TDI reviewed in 2024, none were disapproved, according to the TDI. From 2022 to 2023, insurance premiums in Texas increased by 23%, marking the highest rise in the nation in that timespan. This is higher compared to the national average increase of 11%, according to a report from S&P Global, a company that specializes in information and analytics around nance and business. In Harris and Montgomery counties, home insurance rates rose 28% and 31% between
-1% or less
0% to 19%
20% to 39%
40% to 59%
60% to 80%
No data available
Brazoria County: +24% Fort Bend County: +47% Galveston County: +24% Harris County: +28% Montgomery County: +31%
SOURCE: NATIONAL BUREAU OF ECONOMIC RESEARCH¢COMMUNITY IMPACT
2020-23, respectively, according to the National Bureau of Economic Research. Jeanna Bumpas, an independent producer with Helix Insurance Group who works in the Lake Houston area, said as there are more claims made due to more severe weather, reserves at insurance companies get depleted and have to be built back up, which can increase premiums. She said the economy is also driving up insurance premiums. John Cobarruvias, a state consumer advocate, said he feels price increases from contractors are a cause for rising insurance costs. The cost of repairing items such as roofs or other structural aspects of a home have risen over the past decade, he said, which in turn drives up insurance costs.
Nonrenewal rates by county
Throughout the Greater Houston area, more homeowners have opted to not renew their insurance polices year over year since 2021.
2018 2019 2020 2021
2022 2023
At the Capitol
0.5% 1%
1.5% 2%
0%
feel this approach will help because it doesn’t directly deal with rate increases. However, Paul said the state is limited in its ability to address the issue. Paul said he feels the state needs to incen- tivize competition to attract more insurance companies to spread out the risk and poten- tially lower rates. He said he believes the state setting direct rates or limiting increases could cause companies to leave. “Having government interference come in and set a rate is a total disaster,” he said.
To help solve the issue, the Texas Legislature recently passed a few bills during its 89th session, including House Bill 2067 from Rep. Dennis Paul, R Clear Lake, which requires insurers to provide a reason for when they decline, cancel or don’t renew a policy. Gov. Greg Abbott signed HB 2067 into law June 20, eective Jan. 1. Paul said he hopes the legislation will hold insurance companies accountable while also assisting the state in determining why companies are dropping customers. Some, including Cobarruvias, said they don’t
Brazoria
Harris
Montgomery
SOURCE: U.S. SENATE COMMITTEE ON THE BUDGETCOMMUNITY IMPACT
20
COMMUNITYIMPACT.COM
Powered by FlippingBook