Bay Area Houston

In 2003, as a consumer advocate, I watched as the State Legislature reformed home insurance as promised during the 2002 campaign. After signing the significant reforms in Senate Bill 14 then Governor Rick Perry stated, “This comprehensive reform measure will stabilize the home and auto insurance market, rid the insurance industry of fraudulent practices and ensure Texans have access to fair rates offered in a competitive market”. 

So, in the words of Texans across the state: How’s dat workin fer ya buddy?”

It isn’t. Twenty years later insurance premiums are out the roof. Deductibles are so high many wonder if it’s worth paying for insurance. Homeowners in the Bay Area have reported increases in their premiums jumping by 25-100%! Deductibles have risen to over $10,000. Insurance companies are not renewing policies or writing new policies in the area. I’ve talked with homeowners, business owners, Homeowner Associations, insurance agents, realtors, and city and county representatives and the concern is across the board. This issue must be addressed. 

And it will. Again. Like in 2002 the Lt. Governor has issued interim charges to the Senate Business and Commerce Committee titled “Addressing the rising cost of insurance” in preparation of the upcoming legislation session in 2025. Unlike 2002 consumers must demand legislation that will significantly reduce premiums and require reasonable deductibles as the Governor promised twenty years ago. That must be the bottom line. We literally cannot afford another round of empty promises. 

The legislation of 2003 provided significant changes to the regulations of the industry allowing the insurance industry to raise rates without justifying the increases with the Texas Department of Insurance. Coverage for foundation, water, and sewer were removed from policies making the coverage optional. The value of the home, set by the insurance companies, saw massive increases resulting in higher premiums. These are just a few examples of the reforms of 2003, but the bottom line is that the reforms failed miserably.

In 2003 the industry blamed the mold issue for high increases. This year they will blame inflation, the Texas freeze, and more active storms. They will probably blame lawsuit abuse after companies refuse to pay on claims to consumers. Inflation has taken a toll, but it not only has subsided it shouldn’t be a reason to double premiums. The Texas freeze wasn’t the fault of homeowners, yet the Legislature passed a bill forcing consumers to pay for the failure. We shouldn’t have to pay for it again. In 2003 the legislature passed significant tort reform limiting lawsuits and yet that too has failed. It hasn’t reduced insurance premiums. These failures are not recent. There were significant warnings ever since the reforms passed yet our elected officials did nothing.

It’s time for consumers to take action. The Business and Commerce Committee will be accepting input from the community and will hold hearings concerning the interim charges. State Senator Mayes Middleton, who sits on the Committee, should demand hearings within the community instead of just in Austin. State Representative Dennis Paul, Mary Ann Perez, and Briscoe Cain all sit on the House Insurance Committee. They too should call for local hearings.

In the meantime, consumers are organizing a townhall type of meeting in the Bay Area to address this issue. Elected officials will be invited to participate and provide input on how insurance rates have gone unchecked for so long and what they intend to do about it. We can no longer sit quietly waiting for action to be taken or for promises to be made. 

Consumers need to either stand up and be loud or sit down and be quiet. I’m standing.

This entry was posted on Thursday, May 30th, 2024 at 7:01 am and is filed under Consumer. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.