Texas Insurance Year in Review

Christmas dinner has been put away and the used wrapping paper bagged and carried out. Many websites are now posting how and where to celebrate New Year’s Eve, and showing various retrospectives on the year in review. I think this is a great time to look back over the last 12 months, and peek into what’s coming for Texans and their home, car, health, and life insurance.

Home Insurance: Exactly one year ago, as I write this, I was wearing shorts and a t-shirt because the weather was so warm. A cold front roared through north Texas spawning thunderstorms and 11 tornadoes which swept across Red Oak, Garland, and Rowlett damaging or destroying over 1,200 homes and businesses.

Spring followed this up with a series of hail storms that damaged homes and vehicles from Denton to Allen and points east, as well as in San Antonio. Thousands of roofs have been replaced and cars totaled.

Insurance claims climbed into the billions for these storms resulting in home insurance premiums rising, in some cases dramatically for people living in the affected areas. I expect to see all home insurance carriers raise rates for 2017 and possibly through 2019 or 2020.

The cost of homes continues to rocket upward in the Dallas / Fort Worth area. Residents have seen prices rise 43.3% over 5 years with the median value of a home in Dallas hitting $159,200 and median prices hitting over $365,000 per Zillow.

This increased cost of housing sets up a tug of war between mortgage underwriters and insurance underwriters as to how much home insurance coverage is needed to cover the loan versus the replacement cost. I expect this to result in higher amounts of coverage and thus higher insurance costs for homeowners for the next year or two unless prices cool or more home inventory is available.

Car Insurance: Auto rates continue to fluctuate. Some carriers have raised rates while others have cut rates or left them unchanged. There are a couple of long term trends I expect will result in higher car insurance rates for north Texas and throughout the state.

The average cost of a new vehicle is slightly more than $34,000. Part of the increased cost is computer driven safety systems such as lane departure warning, assisted braking systems, and more. In addition, when a car is involved in an accident now, the cost of replacing these systems rivals or exceeds the cost of body work.

Five of the nation’s eleven fastest cities are in Texas. North Texas has a projected population of 15 million people by 2050. More people means more cars on our already crowded streets. More cars and more drivers means more wrecks. Throw these factors into the mix and I believe our car insurance rates will rival California’s in the next 10 plus years.

Health Insurance: Health insurance rates jumped up between 20% and 35% for 2017. The hot potato being tossed back and forth by Democrat and Republican politicians is whether to keep the Affordable Care Act, repeal it or modify it in some way. This will continue be tossed back and forth once President-Elect Trump takes office.

I do not expect Obamacare to be repealed since 129 million Americans with pre-existing medical conditions which could be denied coverage if it is repealed forms a formidable voting bloc. I do expect there to be change, however, I don’t expect it to happen quickly. The bottom line is rates will continue to increase until something concrete is decided.

Life Insurance: Life expectancy in the US continued to rise until the last couple of years when it flattened. This led to lower life insurance rates being implemented over the last 10 years. I expect rates to moderate until we see which direction life expectancy goes in the next few years.

What do you think? Share your thoughts, questions, and guesses with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!

Evie Wise
Evie Wise


Evie Wise
Evie Wise

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