Coulter said she estimates her home insurance costs have risen nearly 400% in the last four or five years. The homeowner said she sees an almost $1,000 annual increase on her premium, if not more than that.<\/p>\n
\u201cI think the whole area is at risk, and it makes living here just become more difficult,\u201d Coulter said.<\/p>\n
Greater Houston area insurance rates rank near the top of the state, causing some in the Lake Houston area to forgo insurance. Meanwhile, some insurance companies are leaving the market due to risk.<\/p>\n
The background<\/strong><\/p>\n Coulter, who\u2019s been a Kingwood resident since 2007, said she had a new roof put on her home in December and still lost out on her insurance policy renewal. She said she\u2019s had to find different insurance carriers because others stopped writing policies.<\/p>\n \u201cWe\u2019re starting to get down to very limited options as far as carriers,\u201d Coulter said. \u201cIf we get hit by anything this hurricane season, then I think we\u2019re in a real jam.\u201d<\/p>\n Since 2003, Texas has used a file-and-use system for home insurance, which allows insurance companies to issue higher rates without state approval as long as they notify the state, according to the Texas Department of Insurance<\/a>.<\/p>\n \u201cThey could just slide an envelope across the desk at [the TDI] and tell them, \u2018This is what we\u2019re charging,\u2019 and then put that into practice immediately,\u201d said Ware Wendell, executive director of Texas Watch<\/a>, which is an organization that monitors insurance practices in the state.<\/p>\n It\u2019s incumbent upon the TDI to challenge hikes that don\u2019t comply with state law, Wendell said. Of the more than 2,300 rate filings the TDI reviewed in 2024, none were disapproved, according to the TDI.<\/p>\n From 2022 to 2023, insurance premiums in Texas increased by 23%, marking the highest rise in the nation in that timespan. This is higher compared to the national average increase of 11%, according to a report from S&P Global<\/a>, a company that specializes in information and analytics around finance and business.<\/p>\n In Harris and Montgomery counties, home insurance rates rose 28% and 31% between 2020-23, respectively, according to the National Bureau of Economic Research.<\/p>\n Jeanna Bumpas, an independent producer with Helix Insurance Group<\/a> who works in the Lake Houston area, said as there are more claims made due to more severe weather, reserves at insurance companies get depleted and have to be built back up, which can increase premiums. She said the economy is also driving up insurance premiums.<\/p>\n John Cobarruvias, a state consumer advocate, said he feels price increases from contractors are a cause for rising insurance costs. The cost of repairing items such as roofs or other structural aspects of a home have risen over the past decade, he said, which in turn drives up insurance costs.<\/p>\n Insurance companies have reported they\u2019re facing risks, such as natural disasters and the lingering impact of the pandemic on material costs.<\/p>\n \u201cAs far as affordability, we are seeing that the premiums for insurance are increasing quite a bit,\u201d Bumpas said.<\/p>\n \u201cMy home flooded during Harvey. … We replaced every single interior door in the house with the door jamb. At that time, one door [and] one door jamb was $57,\u201d Bumpas said. \u201cFive years later, I went to the same supplier, picked up just the door\u2014not the door jamb\u2014and it was $109.\u201d<\/p>\n Bumpas said insurance companies are having to increase the replacement cost for homes, which drives up the carrier\u2019s premium.<\/p>\n Carriers have increased the premiums of their policyholders nationwide; however, the Houston area has experienced dramatic increases as analysts deem the area \u201chigh risk,\u201d said Laura Crain, president of Crain Insurance Group<\/a>.<\/p>\n Like its predecessors such as Harvey and Winter Storm Uri, Hurricane Beryl caused billions of dollars in damage in July 2024, according to property analytics firm CoreLogic.<\/p>\n In December, the U.S. Senate Committee on the Budget published nonrenewal rates, confirming areas most vulnerable to climate-related risks have the highest nonrenewal rates and the most significant rate increases.<\/p>\n While Harris County had a lower nonrenewal rate than neighboring coastal counties, its nonrenewal rate was higher than those further inland to the north, according to the report.<\/p>\n At the Capitol<\/strong><\/p>\n To help solve the issue, the Texas Legislature recently passed a few bills during its 89th session, including House Bill 2067<\/a> from Rep. Dennis Paul, R-Clear Lake, which requires insurers to provide a reason for when they decline, cancel or don\u2019t renew a policy.<\/p>\n Gov. Greg Abbott signed HB 2067 into law June 20, effective Jan. 1. Paul said he hopes the legislation will hold insurance companies accountable while also assisting the state in determining why companies are dropping customers.<\/p>\n Some, including Cobarruvias, said they don\u2019t feel this approach will help because it doesn\u2019t directly deal with rate increases. However, Paul said the state is limited in its ability to address the issue.<\/p>\n Paul said he feels the state needs to incentivize competition to attract more insurance companies to spread out the risk and potentially lower rates. He said he believes the state setting direct rates or limiting increases could cause companies to leave.<\/p>\n \u201cHaving government interference come in and set a rate is a total disaster,\u201d he said.<\/p>\n The conditions<\/strong><\/p>\n In Texas, 160 companies offer homeowners insurance policies, which is a 20% increase compared to a decade ago, according to the TDI. In 2023, insurance companies sold more than 8.7 million policies in Texas\u2014up 35% from 2013.<\/p>\n Still, insurance companies are struggling in Texas, according to filings from multiple insurance companies. In 2022, the San Antonio-based United States Army Automobile Association<\/a>, or USAA, reported the first loss in its 102-year history, according to the insurer\u2019s 2022 annual report.<\/p>\n Statewide, home insurers have paid out more than they collected annually in years that correspond with natural disasters such as Hurricane Harvey and Winter Storm Uri.<\/p>\n Other insurance companies are limiting the policies they write in Texas, filings show.<\/p>\n \u201cOur advice to consumers is to keep shopping,\u201d TDI Communications Specialist Ben Gonzalez told Community Impact in an email.<\/p>\n Looking ahead<\/strong><\/p>\n According to a June 17 report<\/a>, Rice University\u2019s Kinder Institute of Urban Research<\/a> experts recommend data-driven infrastructure planning and accurate flood risk mapping to address climate risks<\/a> across Harris County, where more than 20% of all housing units are in major flood areas.<\/p>\n Hurricane season tips from the TDI include:<\/p>\nHow it works<\/strong><\/p>\n
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