Insurance Reform Information CenterTexasWatch.org
For far too long, insurers have been taking advantage of Texas homeowners. Texans pay the highest insurance premiums in the country. In fact, the average premium for a Texas homeowner is nearly twice the national average. At the same time, insurance policies have been continually whittled away, providing less and less coverage for more and more money. This has resulted in massive overcharges for everyday Texans.
Texas Watch has conducted a scientific state-wide poll of Texas homeowners, and found that a whopping 85% support regulation of the insurance industry and 87% want state leaders to simplify the market through standardized forms.
A Brief History of Homeowners Insurance in Texas - A Texas Watch Report, February 2009(snip)
The result has been five years of massive profits for insurers. The loss ratios for every single year since SB 14 – including the year during which insurers saw increased claims from Hurricane Rita – have produced profits that meet (2003 and 2005) or far exceed those that are considered healthy. The loss ratios for those years were as follows:
o 2003: 58.7%
o 2004: 27.8%
o 2005: 56.8% (this year included the majority of claims for Hurricane Rita)
o 2006: 34.0%
o 2007: 36.5%
Shockingly, the five year average loss ratio – since passage of SB 14 – is a mere 42.7%.
As is clear from these huge profits, insurers have benefited greatly from insurance reform in Texas as enacted by SB 14. Consumers, however, cannot claim the same. Since 2003 when forms were deregulated, consumers have been paying more money for less coverage. Texans still pay the highest homeowners rates in the nation – higher than Florida with its constant hurricanes and higher than California with its mudslides. According to the most recent data as compiled by the National Association of Insurance Commissioners, the national average for homeowners insurance is $764. In Texas, the average homeowner pays $1372 – 80% above the national average – for the same coverage.
Our insurance regulation agency, Texas Department of Insurance (TDI), and our Texas laws are all stacked for the insurance companies - not the ratepayers.
Sonia