Rising Home Owners Rates

Why We Continue to Pay Rising Home Owners Insurance Rates

   We have all seen it. The rise in rates we get with our Home Insurance Renewals. We think the same thought. "I didn't have a claim. Why did my rates go up?"
   According to the Texas Department of Insurance, the biggest piece of the puzzle is the number of Catastrophe claims. Catastrophe claims are caused by Natural disasters. Texas is one of the most volatile weather states in the country. We have coastal counties, subject to hurricanes. We have dry areas subject to dust storms. We have forests subject to wildfires. We have Hail storms pound across the entire state. As of January of this year, Texas has had 119 official Catastrophe claims since 2005.  The National average is 2.6. Every Texas county has been affected.
   Texas has the nation's second highest average premium for all owner-occupied home policies $1,272. The National average is $795.  Texas averages a loss per policy of $743 annually. The National average policy premium would barely cover Texas losses! The average cost to replace a home in Texas is between $150-$174k, below the National cost of $200-$299k. Yet, we incur nearly twice the National average in losses each year.
   This is why we continue to see the rise in Homeowners Insurance rates. You may not have had a claim personally, but your neighbor did. And chances are, it will be you will next time. The tough part about Insurance is everyone pays for claims, whether you had one or not. If it is a tough claim year, you will see an increase in rates the next year.  Texas claims have been on the rise for 10 years now. You add that to the rising cost of construction to rebuild and I doubt we will see rate decreases any time soon.
   One thing to keep in mind is what your insurance company will do for you in the case of a loss. If you pay an average of $1,200 annually for your Home Insurance in Texas, you will have paid $12,000 over the past decade. If a natural disaster destroys your home, your insurance company will pay the average $150-$174k to rebuild it, minus your deductible. They will pay over $137k more to rebuild your home than you have paid them to insure it. This is why, even though we hate to pay those Insurance premiums, they can be worth the cost.

Read the entire article at Texas Department of Insurance report to the Senate Business & Commerce Committee

Have questions about your Home Owners Insurance policy?
Contact the Brockman Agency and let us walk you through your coverage!