Aug 3, 2023 - Real Estate

Texas homeowners insurance premiums rising

Illustration of a house's roof being taken off by a trend line soaring upward through the home

Illustration: Annelise Capossela/Axios

Homeowners across the country have seen significant increases in their home insurance premiums — and Texas is among the states with the steepest increases since last year, the Wall Street Journal reports.

The big picture: Insurance companies are charging more and insuring less to make up for the weather-related losses from the past several years.

Why it matters: The cost of owning a home is already high for many families in part due to inflation and high interest rates.

State of play: Since January 2022, approved home insurance rates have increased between 20% and 30% in Texas, Oregon, Utah, Arizona, Illinois and North Carolina, per a Wall Street Journal analysis of S&P Global Market Intelligence data.

  • Some insurance companies are limiting coverage of roofs and damages from wind and hail.
  • "We're seeing moves to put more of the risk back onto the homeowner, tougher underwriting restrictions and big rate increases," Lauren Menuey, a managing director at independent agency Goosehead Insurance, told the WSJ.

Zoom in: The states where it is most difficult to get property insurance, in order, are California, Florida, Texas, Colorado, Louisiana and New York, Robb Lanham, chief sales officer for insurance brokerage HUB Private Client, told Axios in June.

  • The February 2021 winter storm in Texas was one of the costliest climate disasters that year, causing billions of dollars in property damage.

How it works: Insurance companies must file a rate increase request with the Texas Department of Insurance, but they can implement a hike while waiting for approval.

  • Of the 2,590 rate filings the department reviewed last year, 2,253 were allowed to stand.
  • 229 were withdrawn by the insurer, and 108 were rejected for technical reasons, such as not providing enough information.

By the numbers: The average U.S. homeowner spends around $17,500 on costs other than the mortgage every year, including $1,516 for homeowners insurance, according to the education platform Real Estate Witch.

  • 90% of people who bought a home in the last three years say they underestimated the true cost of owning a home, according to a survey by the platform.

Meanwhile: Hurricane-prone Florida is in the midst of an insurance crisis, as companies have gone insolvent and premiums continue to rise.

  • State Farm and Allstate have stopped offering new homeowner insurance policies in wildfire-prone California, citing "historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market."

Be smarter: The Texas Department of Insurance has these tips for homeowners trying to understand their coverage.

  • Also, some companies offer discounts for bundling different types of coverage.

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