Texas Homeowners Pay the Highest Insurance Premiums for the Second Year in a Row!
It was about a year ago when I reported that Texas led the nation for highest insurance premiums in 2010. Well, the results are in for 2011 and Texas has once again topped the nation as the state with the highest insurance premiums in the land. Roger Mares of KTXS News reports that Texas homeowners pay an average of $1,511 annually for their home insurance. That’s $50 more than Florida, the state that came in second place.
Mares explains that part of the reason for our higher rates stems from the sheer size of our state leading to our weather being more diverse than that of most other states. That may be true, but I suspect part of the reason our rates will continue to rise for the foreseeable future is that insurers are trying to make up for the losses they experienced as a result of Hurricane Ike, which CNBC ranks as the third most expensive hurricane in U.S. history.
The article gives tips for trying to reduce your homeowner’s insurance premium. Suggestions include performing routine maintenance on your home to avoid preventable losses, buying a new roof for your home, equipping your home with an alarm system, and taking advantage of renewal discounts. The best piece of advice from the article is to visit yearly with your insurance agent. The agent can fill you in on any legal changes, as well as informing you of discounts that may apply to your policy.
Sergio,
As a claims person working for a company I read these postings regularly. I am often appalled by the behavior of the insurers you, Chip and the rest of the team cite, and find that reading these makes me better at doing my job right.
That said, I handle claims in Texas, and on average I pay 15% more on losses there when compared to the 49 other stats. Most of this is just to avoid the legal expenses of pushing back. I have never seen so many instances of outright fraud, in any other state as I have in Texas, and nearly every loss is inflated well past what could be considered unintentional.
The reason premiums are the highest in the country is not to try to pay for losses sustained over Ike. They are the direct result of the inflated amount that is paid on losses and the (unwarranted) substantial jury awards that are handed out on a regular basis.
While there are some bad insurers out there, the sins of the past are presently being taken out on the industry as a whole.
A fair comparison would have also included the average paid loss. Given the Cost of Living in Texas being much less than other areas such as the North East and California, I think people may be surprised at the amount which is paid by insurers in Texas.
Those are some very interesting points that were made...Which seem to make sense. Unfortunately, for those paying that higher premium for homeowners insurance, it doesn't bring much peace to them. Hopefully one of these days the cost of EVERYTHING will slow down on rising.
I have read articles elsewhere online claiming that homeowners insurance premiums are climbing all over the country because of all the natural disasters last year. I'm curious as to whether we are shifting out of a soft market and into more of a hard market?