Annual Report on Texas Insurance 2014

2013 has come to a close and 2014 is off and running.  Housing in north Texas rocketed last year, however many predict it will cool a bit in 2014.  The population of Texas continues to grow at a rapid pace.  While the rate of growth is predicted to slow a bit in the coming years, it will still grow.

Weather continued to be problematic for Texas with the tornadoes that struck Granbury in May and the ice storm in early December.  The losses for both of those storms combined was less than one of the hail storms that struck north Texas in 2012, but their impact is being felt now.  All of these factors have an impact on Texas insurance rates including home, renters, and car insurance.

Home Insurance:  Texans can no longer “brag” about paying the highest home insurance rates in the country.  Our rates are officially the third highest in the nation according to the National Association of Insurance Commissioners.  Florida claimed the top spot with an average annual home insurance premium of $1,933 followed by Louisiana who now has an average annual premium of $1,672.  The average home insurance premium in Texas is now $1,578.  Rounding out the top 10 are Mississippi, Oklahoma, Alabama, Rhode Island, Kansas, New York, and Connecticut.  Some interesting observations on this list are:

  • 5 of the top 6 states are along the Gulf of Mexico
  • 8 of the top 10 are coastal states
  • The 2 inland states, Oklahoma and Kansas are in tornado alley

It’s not time to break out the party hats and noisemakers though.  Texas home insurance rates are already climbing as many carriers announced rate increases in late December and early January.  The Dallas Morning News reported on Saturday, January 4th: State Farm, Farmers, and Allstate have submitted rate increases with the Texas Department of Insurance ranging from 6.5% to almost 15%.  If TDI allows the rate increases to stand, the impact will be felt by 2 million Texas home owners.

The rate increases are not restricted to the “big three.”  Home insurance rate increases have been announced or implemented by a number of other carriers too.  Some of the carriers have also taken the step to increase their wind/hail deductible from 1% to 1.5% or 2%.  All Texas home owners should review their renewal paperwork for rate increases and deductible jumps.  If you’ve been with the same carrier for more than 2 years, this is a great time to compare rates too!  There’s a pretty good likelihood you’ll find a better rate with equal or better coverage with another company.

The announced rate increases are statewide averages.  North Texas is carrying the brunt of the rate increases due to the high number of weather related claims from 2012 to present.  Tarrant County home insurance rates have jumped the most in the Dallas / Fort Worth area.  Most insurance carriers blame the rate increases on weather and increased repair and construction costs.

Condo & Renter’s Insurance:  Insurance rates on condo and renters insurance has also risen.  No hard percentages have been reported on condo rates, however the average renter’s insurance premium in Texas jumped over 20%.  The average annual premium for a Texas renter’s policy is up to $225 from $187.  This is significantly above the national average for a renter’s policy although the rate of change from last year to this year is only moderate.

I predict rates for Texas home, condo, and renter’s insurance policies to continue to increase until we experience a couple years with no large weather related claims or TDI pushes back on the insurance companies.  It will be interesting to see how Julia Rathgeber, the new Insurance Commissioner at TDI, responds to the latest round of rate increases.

Car Insurance:  Texas leads the nation in population growth based on figures released by the US Census bureau at the end of December.  Our population increased state-wide by 387,000 people from July 1, 2012 to July 1, 2013 and increased by 1.3 million people since April 1, 2010.  Most of the growth in Texas occurred in our urban and suburban areas including: Dallas / Fort Worth (Denton and Collin counties predominately), Houston (Montgomery and Fort Bend counties), Austin and Round Rock, San Antonio, El Paso, and the Rio Grande Valley.  Midland / Odessa also jumped in population growth due to the oil and gas boom, however most rural areas experienced a decline in population.

More people in Texas metropolitan areas means more cars and more drivers.  Ultimately, the rate of population growth in our major cities typically precedes increases in car insurance rates.  I expect car insurance rates to grow over 2014 and the following years which should push us into a top 10 ranking on auto premiums.

Specialty Policies:  Specialty policies is a grab bag of policies including boat, RV, motorcycle, and umbrella policies.  Insurance rates in these policies have grown slowly over the last few years and that remains unchanged.  I don’t expect rates to grow as fast or as much as we’re experiencing in home and auto rates.

Insurance rates fluctuate from year to year.  Some years rates are up while other years we see rates decrease.  Texas is currently in a period of increased rates which makes it very important for consumers to compare when their policies renew along with discussing savings strategies with their agent.  Those who ignore their personal insurance will only pay more.

What do you think?  Share your comments and questions with me in the comments section of our blog or on our Facebook page.  I’d love to hear from you!

Evie Wise
Evie Wise


Evie Wise
Evie Wise

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