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Insurance rates are growing in Texas

August 12, 2014

Maybe everything really is bigger in Texas. As of late, residents in the northern portion of The Lone Star State have noticed higher bills coming from their insurance providers as premiums continue to rise for both homeowners and drivers, according to The Dallas Morning News.

Insurance rates are rising in Texas.
The source, dissecting numbers submitted by the Texas Department of Insurance, stated that the average rates for home and car insurance increased by double digits in 2014. Using eight selected ZIP codes throughout the Dallas area, rates charged by 30 home insurers routinely showed a price jump of 9 percent to 12 percent.

Car owners in North Texas noticed a similar pinch on their wallets. The Dallas Morning News reported auto policies climbed 11 percent for the 53 largest insurers in the Dallas metro area. Auto premiums had typically been more stable than homeowners insurance costs up until 2014, per the report.

The rates from company to company were also vastly different. For example, in Houston, the difference between the cheapest and most expensive insurance company was more than $2,000 per year, according to a report from Value Penguin.

What's causing the ascending insurance rates?

Mark Hanna, an industry spokesman with the Insurance Council of Texas, told Dallas Morning News that North Texas has been a bullseye for major storms, prompting more expensive insurance rates.

“Two years ago, (Dallas-Fort Worth) experienced two of the costliest hailstorms on record, totaling $1.6 billion,” Hanna said. “Other storms since then have destroyed millions of dollars of property in Granbury, Cleburne and, most recently, Denton.”

Hanna said damaging wind and hailstorms has led to “upward pressure" on homeowner rates, which he sees as one of the reasons for the climbing prices because of the high cost of replacing roofs.

When looking at auto rates, Hanna believes technological advancements in the auto industry—with features such as backup cameras—have made the cost of fixing or replacing a vehicle's parts much more expensive.

Alex Winslow, a member of Texas Watch, a consumer group active in insurance issues, believes the insurance marketplace needs a makeover.

“Every year, rates keep going up and up while coverage options get cut,” Winslow told Dallas Morning News. “Texans rightfully expect a reasonable value for their insurance. But Texas homeowners and drivers keep paying more and getting less.”

Homeowners and car owners hoping to land an affordable insurance rate should consider the offerings from SelectQuote Auto & Home. SelectQuote provides consumers with comparison shopping from 12 of the nation's most respected insurance providers, ensuring the best rate and policy for any particular customer.

Fluctuating rates are troubling

Housing and car insurance rates continue to fluctuate from one agent to the nex. But in 2014, the rate increases seen in both the home and auto sectors greatly surpassed normal inflation. From 2008 through the middle of this year, the total inflation rate in the U.S. was 10.5 percent. Auto and home insurance rates have increased nearly that much in as little as six months in 2014.

Consumers seemed especially unhappy with rising rates in 2014 because most insurers claimed large profit gains in 2013. Dallas Morning News stated home insurers gave homeowners an average of 44.8 percent of their premiums to cover property losses in 2013. That was a major boost in profits from 2012 when insurance companies doled out 54.5 percent of premiums to pay for losses. The source reported that a loss ratio of 60 percent or lower is considered a good target for profitability.