Data shows premiums have skyrocketed since 2009 for home coverage in the state.
Though the premiums for homeowners insurance in Texas have been the most expensive among all of the states for a long time, recent data has revealed that they have climbed 21 percent since 2009.
This increase is much faster than the rate hikes seen in most other states.
This data came from a report released by the Texas Department of Insurance. This same report identified a number of different factors that have contributed to the increases in homeowners insurance premiums. They consisted primarily of the industry models that forecast greater losses from property damage in this state from natural and weather related disasters such as wildfires, hail storms, and hurricanes.
Rising homeowners insurance company expenses are also contributing to the rising prices.
These expenses include everything from increasing overhead costs to heightened commissions for agents. Moreover, the dropping interest rates have meant that the insurers aren’t seeing the investment returns that they once enjoyed.
The average Texas homeowners insurance policy came with $1,412 in premiums last year.
This data was included in the study and was presented to a state Senate committee by Eleanor Kitzman, the Insurance Commissioner for Texas. The report also pointed out that the average loss that is seen on claims in that state are the highest in the U.S., which is a primary reason that the rates remain as high as they are.
Kitzman stated that the Insurance Department examined several different factors to try to pinpoint the cause of the high homeowners insurance costs in the state. However, it felt that the high losses were the “primary driver” of these high and rising premiums. These losses included both potential catastrophe and ordinary losses.
The report said that “A state-by-state analysis does not indicate a strong correlation between premium levels and the type of insurance commissioner, the type of rate filing law, restrictions on underwriting, or the ease of non-renewal and cancellation of a policy.” It added that there is both a high level of catastrophe exposure and a high average loss per policy in Texas.
The report’s homeowners insurance findings work against the hope that lowering regulation in the state would result in lower premiums.