What is the Average Cost of Texas Home Insurance?
The National Association of Insurance Commissioners says the average cost of Texas Home insurance in 2009 is $1409, a 28 percent increase over 2008. That's 58 percent higher than in Florida, which is the next most expensive state. The national average for home insurance is just $804.
The reason the average cost of Texas home insurance is so high is because of the number of claims due to hail, tornado and wind damage. There also is the issue of mold. In 2003, the state legislature passed a law requiring companies to pay out for mold treatment. This increased the overall cost of homeowners insurance as well. While both mold and weather damage are low-ticket items, there are a lot of them so it adds up.
Is it fair that Texas residents have to pay so much for claims that are low compared to hurricanes and earthquakes. Well, you have to realize that in Florida, for instance, homeowners are required to purchase a separate hurricane rider which is in addition to their normal homeowners insurance. This makes the cost of their homeowners insurance look like it is lower but for comprehensive coverage, they need additional insurance.
Another issue is catastrophe funds. Texas requires it while other large states like Florida and California do not.
This, however, comes as no relief to Texans who constantly see their insurance rates rise by double digits each year.
The state legislature is not blind to what is going on. They are looking at ways to lower insurance rates. For instance, one proposal requires that the largest insurers get permission from the state to increase their rates. They do, however, have to be careful. If they push the insurance companies too far, they might respond by not offering any coverage in the state. That would be worse than having high insurance rates.
However, the legislature cannot stop the weather related property damage so even if there is relief in future rate hikes, Texans are likely to continue to have among the highest rates in the country. - 23211
The reason the average cost of Texas home insurance is so high is because of the number of claims due to hail, tornado and wind damage. There also is the issue of mold. In 2003, the state legislature passed a law requiring companies to pay out for mold treatment. This increased the overall cost of homeowners insurance as well. While both mold and weather damage are low-ticket items, there are a lot of them so it adds up.
Is it fair that Texas residents have to pay so much for claims that are low compared to hurricanes and earthquakes. Well, you have to realize that in Florida, for instance, homeowners are required to purchase a separate hurricane rider which is in addition to their normal homeowners insurance. This makes the cost of their homeowners insurance look like it is lower but for comprehensive coverage, they need additional insurance.
Another issue is catastrophe funds. Texas requires it while other large states like Florida and California do not.
This, however, comes as no relief to Texans who constantly see their insurance rates rise by double digits each year.
The state legislature is not blind to what is going on. They are looking at ways to lower insurance rates. For instance, one proposal requires that the largest insurers get permission from the state to increase their rates. They do, however, have to be careful. If they push the insurance companies too far, they might respond by not offering any coverage in the state. That would be worse than having high insurance rates.
However, the legislature cannot stop the weather related property damage so even if there is relief in future rate hikes, Texans are likely to continue to have among the highest rates in the country. - 23211
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posted by X - Men @ 4:36 AM
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