The state is already the third most expensive in the country and now the prices of coverage are headed up again.
Three Texas homeowners insurance companies have announced that they will be increasing the premiums that they charge for providing coverage for the properties of the residents of the state.
These new and higher rates are going to be going into effect for new and renewal policies.
The affected Texas homeowners insurance customers are those who have their policies with Allstate, Farmers, and State Farm. These three home insurers each gave their notifications to the Texas Department of Insurance regarding their intentions to raise their rates for this coverage. These higher payments will now be required from policyholders, despite the fact that they are already paying some of the highest premiums in the country, with only property owners in Florida and Louisiana paying more.
The Texas homeowners insurance providers did not have their rate hike submissions rejected.
Even though the state’s Department of Insurance has the authority to reject a proposed rate increase from an insurer if they find it to be imprudent or excessive, this did not occur in this circumstance. Without a rejection, this means that the companies have been allowed to move ahead and charge more to their policyholders.
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The insurers justified their need to charge their customers higher premiums, despite the already high rates and the fact that 2012 was considered to be “very profitable”. As of yet, the figures regarding the profitability of 2013 have yet to be released. That said, the data that has been revealed has shown that on average these coverage providers paid an average of 54.4 percent of their premiums in order to cover the claims from property losses. This is a notable improvement over the percentage that was experienced in previous years.
Typically speaking, the Texas homeowners insurance industry considers any loss ratio of 60 percent or lower to be quite good in terms of its opportunity for profitability. Allstate’s loss ratio was 50.8 percent, while State farm was 47.5 percent, and Farmers paid out 66.3 percent, according to the latest available data.