A Report from Austin 
(BTW halfway through my visit I received my renewal notice. My home insurance increased from $6000 to $9000) 

Last week I was joined by another homeowner from the Bay Area at the Capitol (Thanks Doug). We were able to talk with the staff of most of the members of the House Insurance Committee concerning the rising cost of home insurance in our area. The bottom line? I don’t think they understand the severity of the situation here in the Bay Area..

We were able to meet with our State Representative Dennis Paul and his Chief of Staff. As you may know Representative Paul lives two blocks from me and he had his roof replaced after the hail in May so he must know what we are going through but our conversation was not what I expected. He had a lot of excuses for the rising cost of insurance including inflation, supply chain issues, and lawsuit abuse. All of these combined could not account for excessive rates in our area. These are  talking points used by the insurance industry. They also talked very briefly about “climate change” or as they call it “frequency and intensity of storms)

We made sure they were aware of the excessive cost of repairs which directly affect our premiums. Roofs replacements after a storm should not  cost $32,000 in our area especially when that roof would cost only $8000 under normal conditions. (My estimate was $24,000 and was submitted as $40,000 to my insurance company)

We discussed the fact that the “Free market” is letting the insurance industry free to leave the market. The top 6 companies in Texas will NOT write policies in our area. We are now being pushed into a socialized market run by the State, the Texas Fair Plan, which is not fair.

We provided some solutions like using better building materials, automatic cutoff valves for water pipes, the use of metal roofs. 

I have provided the letter we left with them below. I will have a list of bills affecting our insurance premiums early next week.

The Business and Commerce held a hearing on Senate Bill 1006 filed by our Senator Mayes Middleton. I’ve been critical of the bill since all it will do is require an insurance company to send a letter to explain why they canceled your policy or denied you service. It does NOT require this information to be provided to the Texas Department of Insurance and made available to the public. You can view the entire meeting here starting at 1:19:30. Here is a recap:

• The insurance companies are NOT in favor of this simple bill.
• The insurance companies already are required to provide this information IF you ask.
• Senator Zaffarini asked if this information concerning cancellations and denials are being collected by TDI. (They are not) The Houston Chronicle wrote a story on this problem.
• FYI. The members of the Texas Coalition for Affordable Insurance Solutions, Allstate, Farmers, Farmers Bureau, USAA, Nationwide, and State Farm will NOT write new policies in our area.
• This letter could help homeowners fight the insurance company if the reason for denial contains false information.

Get off your butt and do something! It is easy.

Our Senator Mayes Middleton filed SB1006. The hearing for SB1006 is scheduled for Tuesday March 4 starting at 10:00am in Austin. Our State Representative Dennis Paul filed a “companion” bill which is an exact duplicate. The bill will require an insurance company to write a letter to a policy holder if they deny or cancel your policy. That’s it. Nothing more. It will NOT lower our premiums or deductibles. Please send comments to the following with the subject line Comments on SB1006. Click here to email each. You can also call and and tell them you want to talk with someone about SB1006 in the Business and Commerce Committee. Send it to the following:

Easy cut and paste email addresses:
charles.schwertner@senate.texas.gov
phil.king@senate.texas.gov
cesar.blanco@senate.texas.gov
donna.campbell@senate.texas.gov
brandon.creighton@senate.texas.gov
nathan.johnson@senate.texas.gov
Lois.Kolkhorst@senate.texas.gov
jose.menendez@senate.texas.gov
robert.nichols@senate.texas.gov
judith.zaffirini@senate.texas.gov
mayes.middleton@senate.texas.gov
matt.patterson@senate.texas.gov

Here are some talking points:

• We are in dire need of premium and deductible relief.
• This bill will not reduce our premiums
• This bill will not make our deductibles reasonable
• At the very least this bill should require the insurance companies to report denial of service to the Department of Insurance and make this information public.

I’ll save you the trouble of reading 4 pages.

The Texas House State Affairs Committee was charged to “Examine the impact of current economic challenges on the escalating costs of insurance premiums“. They held a hearing with invited testimony only. Many consumers, especially in this area, contacted the committee. I don’t think it helped. Here is a summary. The full report can be read here starting on page 70.

• Only invited testimony was allowed including a lobbyist from the Texas Coalition for Affordable Insurance Solutions representing the top 6 insurers in the state.
• In 2003 Texas adopted a “file and use” system allowing insurance companies to raise rates without prior approval from the Texas Department of Insurance (TDI)
• TDI has the rights to disapprove the rate increases but has rarely used this right
• Climate change is being blamed for high insurance rates disguise as “Frequency of storms” and “Intensity of storms”
• 60-70% of all premiums are used to pay out claims.
• AARP testified concerning the hardship being placed on the elderly on fixed incomes
• Oncor stated their insurance went from $10 Million to $60 Million in just a few years. This is passed on to consumers
• Insurance companies are complaining about “reinsurance” which I believe is insurance for insurance companies.
• Texas is NOT addressing non-renewals. They are not collecting this data. 5 of the 6 companies in the TCAIS will not cover the Bay Area
• 4 Companies, including Progressive, have left the state
• Legislators are concerned about the lack of transparency in rate increases

Recommendations:
This is disturbing. The outrageous cost of roofing after an event such as hail or a storm was not mentioned. There is evidence of price gouging concerning construction cost. They need to address it.

The recommendations included “Promote Risk Mitigation Programs:” such as the Fortify program Alabama adopted 15 years ago. A water downed bill has been filed on this issue.

They recommend providing tax funded backup to insurance companies to keep them in Texas. That doesnt make sense especially when they also recommend phasing out the Texas Windstorm Insurance Association (TWIA) and the Texas Fair Plan to allow the industry to provide these services. (They do NOT want to provide these services)

They also recommend educating homeowners and placing a surcharge on all insurance companies to pay out disaster claims.

As I said about the Senate report. This was underwhelming.

Underwhelming to say the least.

If you would like to read the report on the interim charges to the Texas Senate Business and Commerce Committee it is available online here starting on page 19. It is interim charge 7 titled “Addressing the Rising Cost of Insurance. It is only 2 pages. Here are my notes/thoughts.

• The Committee held a hearing on Oct 1. The testimony was dominated by the industry.
• Texas has the 2nd largest market in the nation bringing in $290 Billion in premiums.
• The increase in premiums are due to climate change, inflation, labor expenses, supply chain disruptions and reinsurance (LOL. They are using climate change against us to increase our premiums. Inflation is well under control and has been for a while but it did NOT account for a doubling of premiums. Supply chain disruptions were corrected years ago.)
• They ignored the inflated cost of roofing after an event such as hail or extreme weather. Why does a roof cost $24,000 to replace after an event, but only $6000 at other times?
• They blame us for not “shopping around”.
• TDI stated only 4 companies left Texas in 2024 but ignored comments from area such as the Bay Area where 5 of 6 members of the Texas Coalition for Affordable Insurance Solutions (TCAIS) will not longer write policies.
• There was a significant uptick in the Texas Fair Access to Insurance Requirements (FAIR) Plan from 72,626 to 91,841 from 2003 to 2024.
• TDI claims homeowners in Texas saw an average rate increase of 21% in 2023. I’m not sure if that is a rise in rates or premiums which are two different things.
• TDI reviewed 1313 rate filings with 107 filings withdrawn, 78 rejected for administrative discrepancies. They did not disclose how many rate increases were rejected by TDI.
• The recommendations are basic if not ridiculous.
  • Implement guardrails to protect against unfair pricing practices, which could include, but is not limited to, rate filings and premiums assessed to policyholders.
  • Support the efforts of both TDI and OPIC to improve notice to policyholders about rate changes, coverage reductions, and comparison-shopping tools.

I have secured the Webster Activity Center on Jan 7, 2025 for another community meeting to discuss and take action concerning the rising cost of home insurance in our area. We will focus on the upcoming legislative session and how we can take the opportunity to influence our elected officials. For those who are not aware this session begins Jan 14 and will continue till June 2. 

Our elected officials have been invited to attend and discuss what we can do. Please save the date, invite your neighbors, and I will see you Tuesday. Preliminary agenda:

• Short recap of the last meeting
• Update on upcoming legislation
• How can we participate in the process
• Open forum, Q&A

Join our newsletter at www.tinyurl.com/BayAreaHouston

Tuesday Jan 7, 2005 6:00PM-8:00PM
Webster Activity Center
311 Pennsylvania Ave
Webster Texas 77598