Oct 19, 2024
It's about to get even harder for Texas residents to find insurance coverage for their homes — let alone affordable insurance — as Progressive recently became the fifth major insurer to end or limit its coverage in the state.
Texas Insurance Commissioner Cassie Brown, who recently testified at the Texas Capitol on the matter, says insurers appear to be reacting to the rise of weather-related disasters, especially in the wake of the damage caused by Hurricane Beryl.
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“Several companies are making some decisions to not grow as fast in Texas as they have been in the past,” Brown said, according to a KVUE report. “It could be that they are either increasing their deductibles. They may say this is a particular area of the state where we’ve seen a lot of losses. So we’re not gonna grow as fast.”
As insurers start to pull out of disaster-prone states like Texas and Florida, here’s what you need to know to get the coverage you need to protect your home and your family’s financial well-being.
Increased insurance claims and natural disasters likely behind the exits
Nationwide, Texas has seen more billion-dollar disasters than any other state. The Smokehouse Creek Fire in March was the largest in Texas’s history, claiming two lives and resulted in millions of dollars of damage as it ripped over 1 million acres of land.
And then in July, the state was pummeled by Category 1 Hurricane Beryl, resulting in at least 42 deaths in addition to widespread power outages and flooding. The total impact has yet to be determined, but some reports estimate total economic losses will exceed $4 billion.
Progressive’s second quarter report claims 40% of the company’s recent storm losses were in Texas — a factor that may have contributed to the company’s decision to limit policies in the state. Risk consultant Frank Barbella told KVUE that insurance companies leaving Texas has impacted all of his clients, some of whom have seen massive increases in their rates.
“An example would be ... someone that we insured with a carrier that was paying around $2,000, and the renewal from that same carrier with no claims went to $10,000 in one year." Barbella said.
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What to do if you can't find homeowners insurance in Texas
There is good news on the horizon. According to the Texas Department of Insurance, eight insurance companies have been approved to enter the market this year. Residents who are unable to find coverage with larger companies should consider working with smaller, regional insurance companies that are often more familiar with local risks. The Texas Department of Insurance's site HelpInsure.com can help you find coverage.
If your rates increase or you face loss of coverage, ask the insurance company how you can reduce risk factors. Taking actions like clearing brush to reduce wildfire risk, improving home security, and installing storm shutters may help you maintain or find home insurance coverage.
Consider getting a “certificate of insurability” through the Voluntary Inspection Program by hiring an inspector to verify the condition of your home. With this certification, insurance companies cannot refuse to sell or renew a policy unless it inspects your home and provides a list of issues in writing. These certificates are good for three years, provided you don’t make changes to your home.
Finally, Texas residents who have been denied coverage by at least two insurance providers can apply for coverage through the Texas FAIR Plan Association. TFPA coverage is considered a last-resort insurer, and offers limited coverage for fire, windstorms, and vandalism.
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Danielle is a personal finance writer based in Ohio. Her work has appeared in numerous publications including Motley Fool and Business Insider. She believes financial literacy key to helping people build a life they love.
