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DALLAS – Texas lawmakers want to keep the rising premiums for homeowners down, despite acknowledging that only they can do to tackle costs.
Lawmakers have sophisticated bills to help insurers raise rates and limit the amount that homeowners can make their home more insured. They also tried to force the insurer to be more positive with the homeowner when they decided to yank the Yank coverage or deny it in the first place.
The Texans pay some of the highest premiums in the country. On average, Texas homeowners have seen double digit increases in insurance rates in recent years. Such an increase was far from the unprecedented past decade. Homeowners’ insurance rates rose nearly 19% in 2024, according to the Texas Department of Insurance. This is a slight decline from over 21% the previous year.
Insurance experts say many factors have spurred insurance costs in recent years. One is the state’s population boom, with Texas property values ​​rising sharply, increasing the costs of securing homes and businesses. Climate change has strengthened extreme weather events such as hail, hurricanes and winter freezing, making bad weather more common. With the state’s population growing, more people have moved on that bad weather path. When severe weather events damaged homes, the cost of materials for labor and construction increased.
Buying homeowner insurance is not an optional expense. Lenders must purchase insurance to get a mortgage from home buyers. Even if the house is repaid, insurance experts say it’s not wise to go without coverage in case of a disaster.
Despite lawmakers looking for ways to tackle the insurance crisis, they say they acknowledge that many of the factors in insurance cost are beyond lawmakers’ control.
“We can’t control the weather, we can’t control inflation,” Rep. Tom Oliverson, a Cypress Republican behind one such proposal, told a House committee last month. “We cannot control the availability of building materials. We cannot control how a house that has already been built or what standardized it has been.”
And they find themselves in a position to curb exorbitant insurance costs without scaring insurance companies or cratering the state insurance market.
One proposal by Senator Charles Schwertner of R-Georgetown aims to give policyholders a check for sudden rate increases. In Texas, insurance companies can submit proposed rate increases with the state insurance regulator, the Texas Department of Insurance, and implement new rates immediately. If the agency later determines that the increase is unreasonable, they can disapprove it.
Senate Bill 1643, which has cleared the Senate but awaits a committee hearing in the House, will require that the Department of Insurance approve a rate increase of more than 10% before it comes into effect.
“As businesses change their fees, it is mandatory for Congress to ensure that the regulatory environment is giving these applications the level of scrutiny needed,” Schwartner said ahead of the Senate vote on the bill in April.
The proposal elicited a pushback from the insurance industry. The rise in capping rates is nothing to address the drivers underlying the rising costs of providing insurance, said Beaman Floyd, who heads the Texas Coalition of Affordable Insurance Solutions, representing a group representing major insurers, including Allstate, State Farm and USAA. Insurers could pursue a lower rate rise than they would have been worried about regulators not approving something bigger, Floyd said — increasing financial liabilities that could lead to policy cancellations because insurers can’t afford to provide coverage.
“That’s not good for consumers,” Floyd said.
Requiring state insurance regulators to see rate increases above 10% does not necessarily mean that regulators will automatically deny those increases, Schwartner said in a statement. The bill “simply requires review of unchecked rate applications and practices,” he said.
Consumer advocates argue that the state’s current system does not provide actual checks to insurers. This argues that Schwartner’s proposal could be useful in creating theoretically. But they also worry that insurance companies will just seek multiple rate increases to block the intent of the law. Ware Wendell, executive director of The Consumer Rights Group Texas Watch, assumed that insurers could theoretically increase by 9% a month and seek the same increase next month.
“It could be that insurance companies will come in,” Wendell said.
The Texas Department of Insurance would require insurers to justify the fee increase, even if the insurers file multiple increases per year, Schwartner said. If these increases are not justified, the state could still refuse to increase, he said.
Insurance companies and consumer groups agree to some of the proposals. House Bill 1576, written by Oliverson, creates a state grant program that helps homeowners remodel their homes to withstand hurricanes and storms, modeled after a similar program in Alabama. The idea is that if an insurance company cures against bad weather, it is likely to guarantee your home and the cost of guaranteeing your home will be lower.
“This is not mandatory, this is not mandatory — it’s a very unique way to basically lower the costs of insurance by encouraging people. Restructuring your home to a higher standard that reduces less risk and costs,” Oliverson told the House Insurance Committee in April.
The bill cleared the House later last month. The Senate has not yet taken action. How much money a state spends on the program depends on the bill that settles both rooms and the outcome of budget negotiations between the House and Senate.
Lawmakers are considering other ideas. The State Department of Health is overseen by one director appointed by the governor. Another Schwartner proposal would expand it to three commissioners. Lawmakers are also moving forward with billing to force insurance companies to force consumers seeking car insurance to buy car insurance and to request insurance companies to actively disclose whether to refuse homeowners coverage or cancel insurance policies.
Disclosure: The Texas Coalition for Affordable Insurance Solutions and the USAA are financial aids at Texas Tribune, a non-profit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters have no role in Tribune journalism. Find the complete list of them here.
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