Every year, I like to review the current state of personal insurance for Texas. Personal insurance is what most individuals and families concern themselves with. It includes car, home (condo & town homes), renters, and umbrella insurance policies. The goal is to help most people keep their finger on the pulse of what’s happening. An informed consumer is a powerful force!
Home Insurance:
- Texas home insurance rates continue to be the highest in the nation, higher than Florida, Louisiana, New York and even California.
- Rates began to creep in early 2012
- In March Allstate announced a rate of between 3.5% & 7% that impacted the Dallas area
- Farmers followed suit with an almost 10% increase the same month
- Farmers implemented a second rate increase in the fall.
- For Dallas county the rate increase ranged from 13.8% to 15.9% depending on which Farmers policy the customer purchased
- Our neighbors in Collin, Denton & Tarrant counties rate increase ranged from 14.6% to 19.3%
- State Farm announced a 20% rate increase that went into effect for new policies in November and for renewing policies in December.
- The factors most insurance companies are citing for the increases are:
- Texas severe weather – hurricanes, tornados, hail, wind & fire
- Significant payments for losses over 2011 and 2012
- Losses for the June hail storm in Dallas were $1.2 billion
- Losses for the tornados that struck the D/FW area in April exceeded $1 billion
- Losses for the fires in Bastrop, Texas in 2011 were $325 million
- Policy deductibles for most insurance companies were raised to 1% of the dwelling value (most have been there for several years now, but State Farm finally joined did the same).
- The auto / home discount has in many cases become more attractive as insurers look to write two policies for an individual or family.
- Several insurers are making it unattractive to only write the home.
Condo / Town Home and Renters Insurance:
Rates for condo, town home and renter policies are harder to measure due to the lack of reported premium fluctuations.
- Several companies appear to have not touched rates at all.
- For those companies that have increased rates, the increases have been small.
- This is due to holders of these policies are less impacted by hail storms and high wind.
Car Insurance:
- Texas car insurance rates haven’t placed us in the top spot like home insurance has. Our car insurance rates place us somewhere between 10th and 15th.
- Rates have varied by insurance company over the past year.
- I’ve seen some companies increase rates and other reduce them a little.
- Discounts for packaging car insurance with a home, condo or renter policy have remained steady to slightly better than a year ago.
- Drivers with activity, tickets and claims, are paying rates higher than they were.
Umbrella:
Umbrella premiums have experienced an increase too. This premium increase is not great; most umbrella policies are still a bargain if you don’t have teen drivers. Rates on umbrella policies tend to be driven more by exposure such as number of homes, cars, teen drivers, and whether or not the customer is a public or semipublic figure.
Overall Observations:
- Credit is still a huge determining factor for insurance rates. Its influence seems to have grown over the past year.
- People with good credit pay less for all policies than people with average or moderate credit scores.
- Some carriers have even tightened up their underwriting guidelines and are reluctant to write policies for people that have poor credit.
- Claim activity is also having a greater impact.
What have you noticed? Share your observations with us on our Facebook page or in the comments section of our blog. We’d love to hear from you and help in any way we can, even if it’s just answering a question.
