From the cover
Home insurance rates climb
BY RACHEL LELAND
The conditions
The background
Home insurance rate changes
from 2020 to 2023
In Texas, 160 companies oer homeowners insurance policies, which is a 20% increase compared to a decade ago, according to the TDI. In 2023, insurance companies sold more than 8.7 million policies in Texas, up 35% from 2013. Still, insurers are struggling in Texas, according to lings from multiple companies. In 2022, the San Antonio-based United States Army Automo- bile Association, or USAA, reported the rst loss in its 102-year history. Other companies are limiting the policies they write in Texas, lings show. Texas insurance protability Three times in the past decade, insurance companies in Texas paid out more money than they collected, resulting in a loss in certain years.
-1% or less
0% to 19%
20% to 39%
40% to 59%
60% to 80%
Danny Day, a Cypress-area homebuilder, was informed by his home insurer, Hippo, that they would no longer renew policies in Texas due to statewide exposure risk despite having no personal damage history or claims led. “It’s kind of outside of everybody’s control— you’ve got to have homeowners insurance, and you’ve got to pay property taxes—but these costs are, in Texas specically … getting extremely high,” he said. Texas has some of the highest home insurance premiums in the nation, according to the National Bureau of Economic Research. These rising costs are leading some to forgo home insurance altogether. Texas has a le-and-use system for home insurance, which allows companies to issue higher rates without state approval as long as they notify the state, per 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 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
No data available
Brazoria County: +24% Fort Bend County: +47% Galveston County: +24% Harris County: +28%
150% Years with a prot
Years with a loss
SOURCE: NATIONAL BUREAU OF ECONOMIC RESEARCHCOMMUNITY IMPACT
Texas spiked 23%, compared to the U.S. average increase of 11%, according to S&P Global, which specializes in information and analytics around nance and business. John Cobarruvias, a state consumer advocate, said he feels price increases from contractors are a cause for rising insurance costs for policyholders. Gov. Greg Abbott signed House Bill 2067 into law this June, which will require insurers to provide a reason for when they decline, cancel or don’t renew a policy.
100%
50%
0%
*PERCENTAGES ARE BASED ON DIVIDING TOTAL EXPENSES BY REVENUE, RESULTING IN ANYTHING UNDER 100% BEING CONSIDERED PROFITABLE. SOURCE: AM BESTCOMMUNITY IMPACT
Nonrenewal rates by county
How it works
Throughout the Greater Houston area, more homeowners have opted to not renew their insurance polices year-over-year since 2021.
Looking ahead
Insurance companies have recently reported they’re facing risks, such as natural disasters and the lingering impact of the COVID-19 pandemic on lumber and building costs. Carriers have increased the premiums of their policyholders nationwide, but the Houston area has experienced dramatic increases as analysts deem the area “high risk,” said Laura Crain, presi- dent of Crain Insurance Group based in Cy-Fair. Like its predecessors, such as Winter Storm Uri and Hurricane Harvey, Hurricane Beryl caused billions of dollars in damage, according to property analytics rm CoreLogic. In December, the U.S. Senate Committee on the Budget published nonrenewal rates, conrming areas most vulnerable to climate-related risks have the highest nonrenewal rates and the most signicant rate increases.
0% 2018 2019 2020 2021
2022 2023
According to a June 17 report from Rice University’s Kinder Institute of Urban Research, home insurance increases brought on by extreme weather events could add more than $15,000 to home costs. Experts in the report recommend data- driven infrastructure planning and accurate ¢ood risk mapping to address climate risks across Harris County, where more than 20% of all housing units are in major ¢ood areas. “The risk is going to continue to grow, and it’s really on us to gure out ... what we do with these spaces where we have so much infrastructure and economic investment and development in a place like Houston,” said Jeremy Porter, head of climate implications research at the nonprot First Street.
0.5% 1%
1.5%
Brazoria
Fort Bend
Harris
SOURCE: U.S. SENATE COMMITTEE ON THE BUDGETCOMMUNITY IMPACT
17
CYFAIR JERSEY VILLAGE EDITION
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