2015 ended with a bang as tornados swept across north Texas damaging or destroying over 1,000 homes and damaging vehicles and commercial properties. Spring of 2016 was not to be outdone either. Last March and April, north Texas was struck by 3 hail storms and San Antonio suffered the worst hail storm in Texas history. The four hail storms combined claims totaled about $1.3 billion in damages to cars, homes, and businesses. Let’s examine how home insurance is being impacted this year.
Home insurance companies are responding to last year’s storms in a mostly predictable way. Rates are increasing for 2017. While not all the carriers have released their rates, the ones who have appear to be in the 20% to 30% range for new and existing policyholders, particularly those with homes in the zip codes west of Denton to east of McKinney. I expect the rates in this area to remain high at least through 2018 and possibly 2019.
Areas south of these zip codes such as Coppell, Carrollton, Farmers Branch, Dallas, and Richardson, are also experiencing rate increases, although they are slightly lower. While rates will climb for most in north Texas, I do expect the rates in these areas to trail the increases of our neighbors to the north. This assumes however, we avoid a major hail storm in north Texas for the next couple of years. If we get another major storm or series of storms, then rates will climb faster and remain higher for a longer time period.
The second way home insurance companies are responding are restrictions on roofs. Below are a couple of examples of the restrictions I’m seeing and have heard about.
- One company will not write a new policy on any home with a roof older than 15 years old.
- Another company adjusts the hail deductible from 1% to 1.5% of the dwelling value if the roof is over 9 years old or receives no written proof it’s younger.
- Several companies default the wind / hail deductible to 2% if they don’t also write the car insurance.
- Another company will write roofs up to 15 years old on a replacement cost basis but moves to a depreciated or actual cash value basis if 16 years old or older.
- There is a rumor one company will only write actual cash value or depreciation based coverage on all new business in the coming two to three months and move all existing policyholders to this coverage as they renew.
We should see a few more announcements of rate changes and roof restrictions made by May.
I believe there are a few actions home insurance policyholders can take to help mitigate the rate hikes and roof restrictions including:
- Review your home insurance options with other companies. Rates may change slower or faster depending on the insurance company and there are still good options available.
- Replace your roof if it needs it, especially if your home is located between Denton and McKinney. Time is running out to file a hail claim if your home was affected.
- If you did replace your roof, confirm with your agent the new roof discount is added to your current policy. This can provide a nice savings.
What do you think? Share your comments, thoughts, and experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!
