SAN ANTONIO – As major storms, tornadoes, hurricanes, and floods continue to hit Texas, insurance prices are rising throughout the state.
The premiums have been rising steadily, according to insurance agent Luis Leal.
“I’ve never seen the kind of market that we’re in currently, even though I started right after — sort of like — the big financial crisis in 2007-2008,” he said.
Leal is a co-owner at My Insurance Company, an independent agency in San Antonio. He said he’s seen insurance prices rise as much as 26% in Texas.
The increases are due to natural disasters and higher reinsurance costs, which are what insurance companies pay to cover claims.
“What’s driving that is the fact that we’ve had so many catastrophes in the state of Texas that are so expensive,” Leal said. “I mean, from 2008 to 2023, we averaged about eight catastrophes that cost over $1 billion in claims payouts for insurance companies across the board.”
What does this mean for customers?
Nearly everyone with a home insurance policy has seen their rates rise, but some policyholders have received non-renewal letters. Those notices say home insurance policies may only be eligible for coverage by bundling their auto insurance.
“The home insurance product, especially in Texas right now, is so costly. And one of the ways that they can balance their books financially is to insure more auto insurance,” Leal said. “One of the ways that it benefits the consumer is that the bundling product is going to offer discounts on both the auto product and the home insurance product.”
Leal said it is natural to want to shop around for different insurance providers. He recommends finding an independent agent to compare various coverage providers to see which would be the most competitive for the customer.
While switching providers could mean cheaper insurance, Leal said it could also lead to other costs.
“Now, I have to emphasize if you are moving to a different carrier, be cautious about the application process,” Leal said. “Because what a lot of carriers are doing now is that they’re doing property inspections on these risks that they’re taking for home insurance. And some of them are very, very particular or sensitive.”
That could mean removing debris in the yard, cutting down overhanging trees, redoing a fence or using other mitigation techniques. Ultimately, Leal believes the market could start to stabilize in 2025 because of advances with cost forecasting technology and a lighter burden on the supply chain problems.
“Hopefully it’s going to be sooner than that. But what we have to consider is we just had another catastrophe, you know, Beryl, in the Houston area. That impacts rates statewide,” he said. “And so we’ve got to hope for no more catastrophes. And as long as that’s the case, I think things will start to kind of even out going into 2025 and beyond.”
