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As coverage regions continue to narrow, Texas has joined Louisiana and Florida as the states with the highest prices for house insurance.
Megan Kimball, a reporter for the Houston Chronicle, stated on Houston Matters that the spike started just a few years ago.
“The spike really started happening in 2022 and especially in 2023,” Kimball stated. The Texas Department of Insurance reports that last year, premiums increased by an average of 21% throughout the state. That is twice as much as the previous year.
According to Kimball, the increased risk factors for home insurance are also attributed to climate change.
“There have been more and more frequent storms across the state in the last couple [of] years,” she stated. “It’s not limited to coastal hurricanes alone. Massive hailstorms have occurred in northern Texas. Tornadoes have occurred in Central Texas. Insurance firms are experiencing an increase in losses, which they must recover through premiums.
In the meantime, the average cost of home insurance is almost three times higher for those who live along the seaside. According to Kimball, large insurers are leaving the Texas Gulf areas, much like they did in Louisiana and Florida.
“I’ve talked to a lot of people who live in coastal communities who say Yeah, I called my Allstate agent, I called my State Farm agent, and they say we’re no longer writing policies in your zip code.'” she continued. “It’s certainly happening that major carriers, name brand carriers that we all know, are pulling out of zip codes because they don’t think they can charge enough premium to cover that risk.”
Richmond, Katy, Cypress, Missouri City, and other places like Fort Bend County have been impacted, according to Bianca Sandoval, an insurance agent and the founder of the Insurance Society, who spoke to Houston Matters.
“What we’re seeing is, if insurance companies aren’t shutting down completely, they’re limiting business to certain zip codes,” Sandoval stated. “So, a lot of zip codes have shut down for new business or they are changing or tightening those underwriting guidelines and shutting down in certain areas to try and mitigate that risk.”
According to Kimball, state officials in Austin are the only potential source of help.
“Lawmakers in the interim have really articulated this is an important issue for them,” Kimball stated. “I anticipate that they will address this in some way during the upcoming session. Since risk is captured by insurance, it is impossible to make insurance affordable without reducing risk. “Are lawmakers going to start tackling risk head-on by funding programs that will help with mitigation, making homes more resilient?” is what I’m hoping to get out of the next session.
According to Kimball, Louisiana and Alabama already have such systems in place. Homeowners are receiving assistance to fortify their roofs and lessen storm damage when it happens. As a last resort for certain homeowners, Louisiana has even established a state home insurance program.
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