The big bump in homeowner’s insurance premiums is a hot topic among readers.
Dallas Morning News real estate reporter Nick Wooten shared that the average annual Texas insurance premium costs $4,647, the fourth-highest in the nation. For comparison, the average across the U.S. is $2,478, according to LendingTree.
If you’re frustrated about the 55% increase in premiums since 2019, you are not alone.
The Watchdog recently shared frustration about low-ball insurance offers that come in the mail. But when you call, the actual costs may be a lot higher than the marketing letters indicate. Legally, these deceptive mailings are not bait and switch scams, state insurance regulators tell me, because they have tiny disclaimer print in font so small you may need a magnifying glass. No kidding.
Before I share readers’ letters on this, I want to emphasize that Texas is what’s called “a file and use” state. This means a company doesn’t have to ask permission to increase prices and wait for a decision. A company files its rate increase with the Texas Department of Insurance, and then it can raise prices immediately. Generally, the rates are approved.
If you want to change that, you need state legislators to rewrite insurance laws giving TDI the power to reject unsupported rate increases.
Insurance companies say they have no choice but to raise premiums due to extreme weather events, the increasing cost of construction materials, labor and inflation.
Readers’ feedback
John Helmer of McKinney helped me understand what a strain these increases put on a homeowner.
“A new poverty has descended on homeowners,” he says. It not only involves the doubling of insurance premiums but also huge increases for HVAC systems, water heaters and wood fencing.
Insurance poverty? I like that term. It conjures images of property owners overwhelmed with property taxes, home improvement costs and insurance so that they can no longer afford their homes.
Here are thoughts from other readers:
David J. Kohl of Dallas, retired from the industry: “Uninformed consumers frankly stand no chance of a good outcome. What consumers purchase isn’t what they expect due to coverage options that are simply not accurate. My renewal this year was going up 24%, and after an extensive search, I was able to improve my coverage and hold my spending essentially flat. This would not have been possible had I not been familiar with the industry and its terms, coverages and conditions.”
Gary Huber of Mesquite: He complains about the low-ball mailings I reported on. When he shopped, the true number was more than double what was promised in the mailings. He says, “I put all the numbers together and sent them to the U.S. Consumer Financial Protection Bureau and the Better Business Bureau. Not much came of it.”
Scott Underberg of Houston: “Finding any coverage is getting tougher, and the specific types of coverage for mold, windstorms and other perils are harder to compare on an even basis without better policy disclosures upfront. I hate to lament the ‘good old days’ of better insurance regulation, as I generally don’t like or want more government regulation, but do we even have a Texas insurance commissioner?” (Watchdog note: Cassie Brown has been insurance commissioner since 2021.)
Donna Hanna of Rowlett: “My friend, you have ignored my first rule of interaction. If I didn’t contact you, don’t contact me. You, of all people, should know that a come-on is just that — a come-on, and it will be too good to be true. What you should have written about was telling people to shred the offers, and how to locate insurance agencies online and compare policies (not necessarily of your property) if they think they want to change insurance.”
Larry Louie of Plano: “There is an expectation that the insurance company cannot lose money on their premiums (which is ridiculous), so TDI does nothing to help Texans. The U.S. has 50 separate insurance regulators (one for each state) instead of a single federal regulator. This results in cherry-picking what states they want to be in. If a state dares to question the premium increases, the company threatens to leave.”
Note: Although other companies have announced they are moving out of California, I have to ask: Why would any company move out of Texas since it’s a “file and use” state where the companies get what they want?
