Bay Area Houston

The articles by Houston Chronicle reporter, Megan Kimble, concerning the rising cost of home insurance are lengthy yet highly informative reads. If you can access the articles, take some time to read them. Here are my thoughts on the article:

Elected officials are not immune from increases. Senator Tan Parker out of the Dallas area says he was dropped by his company and is now paying three times as much for his insurance. State Rep. John Smithee, an Amarillo Republican had his premiums raised by 40% last year. He authored the insurance bills of 2003. Our own State Representative had his roof replaced last month. I am sure he has felt the pinch.

Our elected officials are missing in action. Where are our State officials? Our Representative, Dennis Paul, sits on the Insurance Committee. Where has he been? In office for 10 years he has NEVER convened a town hall meeting to address the issues of the community. We are now in crisis mode and he has still refused to respond to his constituents except for form letter responses if even that. The same can be said about our State Senator Mayes Middleton. Both have been asked to address the community at our Jan 7th meeting.

Climate Change. For decades the industry and elected officials have denied climate change but are now claiming that is the main factor in the rising cost of insurance. So they did nothing over the last 20 years to minimize the risk due to climate change and are now passing the consequences on to us.

Rates vs Premiums. This wasn’t specifically discussed in the articles but realize rates and the cost to rebuild determines your premium. So when the Texas Department of Insurance says that rates only went up by 21% over the last few years that might be true but the cost to rebuild has skyrocketed as has your premiums. Case in point USAA based the cost to rebuild my home at $645,000 driving my premium up over $15,000. Your deductible is also based upon a percentage of the cost to rebuild.

The Texas Coalition for Affordable Insurance Solutions. They are quoted in the article. They are a lobbyist group funded by the top 6 insurance companies in Texas. Over the last 20 years they have done NOTHING to find solutions for affordability. I have written about them here. The same lobbyist quoted in the article was the same one leading the fight to reform insurance back in 2023.

Lowering the risk and damage. Other states have been proactive in addressing the issue by encouraging better storm resistant products for homes and roofs. They have created incentives for homeowners to use these products. Texas has done nothing over the last 20 years. Even our HOAs can refused the use of these products and the State will do nothing to stop them from enforcing it. There are hail resistant roofs available, even metal ones, and water cut off valves that could detect a leak and prevent damages to a home due to busted pipes. The industry along with our elected officials are finally discussing these possible solutions, 20 years too late. There have been fills filed to address this issue but the Republic Party in the Senate killed them.

Inflation. Yes some of the increases can be attributed to inflation but it is NOT responsible for a 50% increase or a 100% increase. This, along with climate change, are a great excuses to justify dropping your coverage or over charging. Inflation is now under 3%.

Surge Pricing. This wasn’t discussed in the articles but it is real. Why does a roof cost $30,000 when it usually would cost just $8,000? In 2008 after hurricane Ike bids for a new roof ranged from $10,000-$15,000. I had my roof replace two years later for $4800. This year after a hail storm bids were coming in at $23,000 for the cheapest roof. My roofer eventually quoted $24,000. This needs to be addressed.

This entry was posted on Thursday, December 5th, 2024 at 8:22 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.