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    282 views4 pages

    Fact Sheet: Texas Families & Homeowner's Insurance

    Uploaded by

    billwhitefortexas

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 4

    Texas Homeowner’s Insurance Fact Sheet

     Texas homeowner’s insurance premiums are hundreds of dollars more than


    premiums paid in other states.

    The National Association of Insurance Commissioners (NAIC) prepares an annual report that
    compares homeowner’s insurance data from all states. Their most recent report shows that
    Texans paid higher premiums for the most common homeowner’s policy than homeowners in all
    other states except Florida.1 For the three previous years, Texans paid more than homeowners in
    all other states.2

    In 2007, the most recent year for which comparative data is available from NAIC, the average
    premium for the most common policy for Texans was $1,448, which is 76% higher than the US
    average premium of $822.

    In the first nine years of Perry’s governorship, the average premiums paid by Texans for all
    homeowner’s insurance policies have increased by more than 48% from $911 to $1,347.3 And
    rates continue to increase in 2010.4

     Years ago, when he first ran for governor, Perry admitted that Texas lacked
    effective regulation, and he promised reform.

    In 2002, Perry said “In


    too many cases, homeowner's insurance is getting more expensive….. Three
    big companies control 66% of the Texas homeowner's market….. It's time for the homeowner's
    insurance market to get a correction…. A tougher option – especially when a few companies
    command a large share of the market - is a prior approval rating system.  Prior approval would
    require the Insurance Commissioner to approve or disapprove certain rate increases before
    customers are asked to pay – increasing the Commissioner’s ability to get control of an unstable
    market and prevent rate shock for Texas consumers….  the status quo is unacceptable.”5

     But eight years later, not much has changed.

    PERRY STAFFERS TURNED INSURANCE LOBBYISTS 6

    Staff Compensation Range

      Low High
    M
    ike Toomey $1,530,000 $2,860,000
    C
    liff Johnson $50,000 $100,000
    P
    atricia Shipton $135,000 $300,000
    V
    ictor Alcorta $400,000 $800,000
    W
    illiam G. Phenix $125,000 $340,000
    R
    obert Howden $50,000 $100,000
    L
    uis Saenz $50,000 $100,000
    B
    ill Jones $300,000 $550,000
    V
    ictoria Ford $250,000 $500,000
    C
    hris Cronn $400,000 $600,000
    Total $3,290,000 $6,249,999
    Insurance company clients include State Farm, Allstate & Liberty
    Mutual
    The same three companies dominate the market7, prior approval was never instituted, and
    insurance premiums continue to climb. In the meantime, at least 10 Perry staff members have
    made millions of dollars as insurance industry lobbyists. Perry has collected more than $1
    million in campaign contributions from the insurance industry. Perry even gave subsidies
    totaling $3.6 million to Allstate and Nationwide, two companies with significant market share in
    Texas,8 using payroll taxes collected from all Texas employers, most of which are small
    businesses. Homeowner’s insurance companies have retained more than $14 billion after paying
    out all claims in nine years since Perry has been governor—almost twice what they retained
    during the ten years in which Ann Richards and George W. Bush served.9
     As governor, Bill White will require insurance companies to show why a rate
    increase is needed before allowing it to go into effect.

    Today, insurance companies can raise their rates whenever they want, as much as they want,
    without getting the Texas Department of Insurance’s prior approval. If the agency believes the
    rates are excessive, its only recourse is to initiate a legal process that can take years to resolve,
    while the consumers keep paying the excessive rates. Many other states require insurance
    companies to get approval before they raise their rates. Fourteen states require prior approval for
    all rate changes: California, Hawaii, Maryland, Mississippi, Nevada, New Jersey, New Mexico,
    North Carolina, North Dakota, Pennsylvania, South Carolina, Tennessee, Washington and West
    Virginia. Nine states require prior approval under certain circumstances such as a high
    percentage rate increase or rates charged in non-competitive markets: Alabama, Alaska,
    Kentucky, Louisiana, Arkansas, Kentucky, New Hampshire, Vermont, and Wyoming.10 We
    should require insurance companies to obtain approval before they raise their rates, and TDI
    should respond within a reasonable period of time.
    1
    Dallas Morning News, 12/30/09 “Texas homeowners’ insurance rates drop to No. 2 in new study,” accessed at
    http://www.dallasnews.com/sharedcontent/dws/news/texassouthwest/stories/DN-
    insurance_30tex.ART.State.Edition1.4bde577.html ; National Association of Insurance Commissioners 12/29/09 report
    available http://www.naic.org/
    2
    See p. 9 of 12 at http://www.naic.org/documents/research_stats_homeowners_sample.pdf
    3
    Source: OPIC data on average rates for homeowner’s policies, 2001-09.
    4
    State Farm to raise rates for second time in less than one year, Ft. Worth Star-Telegram, 3/11/10 accessed at
    http://www.star-telegram.com/2010/03/11/2034174/state-farm-plans-to-raise-texas.html.
    5
    Speech by Rick Perry, 2/12/02 accessed at http://governor.state.tx.us/news/speech/10464/
    6
    These numbers include all insurance company interests.
    7
    The three companies that dominated the market are and were State Farm, Allstate and Farmers (Zurich). See quarterly
    reports by TDI for 2001 (p.34) at http://www.tdi.state.tx.us/reports/pc/documents/pcqlr01q4.pdf and for 2009 (p.22 ) at
    http://www.tdi.state.tx.us/reports/pc/documents/pcqlr09q4-2.pdf.  
    8
    http://governor.state.tx.us/files/ecodev/TEF_Listing.pdf
    9
    http://action.billwhitefortexas.com/page/-/assets/OPIC%20data%20Premiums.Claims%201991-2009.xls
    10
    NAIC’s Compendium, 2005.

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