After moving from Maryland, Peter and Alice Kochunov bought their Pearland home in 2023 but found their home insurance bill was 10 times that of their policy in Maryland.
Those rates prompted the couple to avoid filing a claim after Hurricane Beryl caused over $15,000 in property damage to their home last July due to concerns they wouldn’t be able to renew their policy, Peter Kochunov said.
Texas has some of the highest home insurance premiums in the nation, according to the National Bureau of Economic Research.
These rates and the resulting cost are leading many in the area to forgo home insurance altogether. Meanwhile, some insurance companies are leaving the market due to risk.
The background
Since 2003, Texas has used a file-and-use system for home insurance, which allows insurance companies to issue higher rates without state approval so long as they notify the state, according to the Texas Department of Insurance, or TDI.
These are referred to as “drive-by-filings,” said Ware Wendell, executive director of Texas Watch, which is an organization that monitors insurance practices in the state.
“They could just slide an envelope across the desk at [Texas Department of Insurance] and tell them, ‘This is what we’re charging,’ and then put that into practice immediately,” he said.
It’s incumbent upon the TDI to challenge hikes that don’t comply with state law, Wendell said. Of the more than 2,300 rate filings the TDI reviewed in 2024, none were disapproved, according to the TDI.
From 2022 to 2023, insurance premiums in Texas increased by 23%, marking the highest rise in the nation in that timespan. This compared to the national average increase of 11%, according to a report from S&P Global, a company that specializes in information and analytics around finance and business.
John Cobarruvias, a consumer advocate and Clear Lake homeowner, said he feels price increases from contractors are a cause for rising insurance costs for policyholders. Costs of repairing items such as roofs or other structural aspects of a home have risen over the past decade, he said, which in turn drives up the costs of insurance.
“The roofing company charges that large amount, the insurance company pays that large amount and then we get charged for it in their premiums,” he said.
To help solve the issue, the state is looking at some bills in the ongoing legislative session, such as House Bill 2067 from Rep. Dennis Paul, R-Clear Lake, which would require insurers to provide a reason for when they decline, cancel or don’t renew a policy.
Other help comes through the Texas Windstorm Insurance Association, or TWIA, which is a state-sponsored insurance provider for homeowners who can’t obtain a policy from private insurers.
The number of polices written for homeowners in Brazoria and Galveston counties through TWIA has increased by at least 36% in each county dating back to 2019, according to TWIA data.
