Home Insurance Premiums Increases 7 Percent to 8 Percent in Texas

Texas homeowners are discovering that their premiums are increasing as they renew their homeowner’s insurance policies. According to a recent article in the Dallas Morning News, insurance companies in Texas have raised their home insurance premiums an average of seven percent, and this has been done despite immensely healthy profits and below-average property damage and property losses.

When it comes to raising the cost of property insurance in Texas, State Farms Insurance is leading the charge. State Farm has consistently had the highest or second-highest homeowner’s insurance premiums in the State of Texas, especially in metropolitan areas, such as Dallas and Houston. What is interesting is that State Farm, which is the largest property insurer in the state of Texas, is currently raising its rate in the midst of having to refund more than $352 million to its customers based on past overcharges, which is a part of a settlement with the Texas government.

While the rate increases that are being implemented in 2015 are less than the increases in 2014, they are still considerably higher than the increases around the nation that average approximately 1.5 percent. The rate increases for homeowner’s insurance in Texas is also higher when placed juxtaposed to the rate of inflation in the U.S.

In a stark contrast, automobile insurance in Texas has remained stable, with the average increase being one percent, which is significantly lower than the 11 percent increase that the industry experienced in 2014.

A number of consumer groups have weighed in on the rate hikes for property insurance, and the message is clear. There is a consensus that the rate increases or unjustified. It has been suggested that state regulators have been unsuccessful in effectively regulating the cost of homeowner’s coverage in Texas.

In an attempt to justify the significant rate increase, despite profits in the last quarter and in 2014, insurance industry representatives are citing the increased cost of replacing roofs, as well as the increased lawsuits filed by homeowners. The industry reps also noted that homeowners have the option to cut their overall costs for their home insurance by taking advantage of various discounts that are available through their carriers. One way that consumers in Texas can receive a discounted rate for their home insurance premiums is to have a security system installed in their home or place of residence.

The feeling of being squeezed by major insurance companies has become an all too common experience for Texas homeowners. Along with the concern associated with the increase in premiums, there is also a concern that insurance companies may be stripping homeowners of certain rights as they lobby the legislature for certain protections, especially when it comes to the rights of policy holders to sue insurance companies for failure to honor coverages listed in policies.

There are current initiatives under way in which consumer groups are demanding that insurance companies in Texas provide fair and competitive rates for their customers. The rise in premium rates has placed Texas residents in a position in which they will have to be increasingly diligent in selecting who will carry their homeowner’s insurance coverage.