The average cost of Texas home insurance in 2009 was $1409 which is 58 percent higher than it was in 2008. Further, it is 58 percent higher than the next highest state which is Florida. In fact, the national average for homeowners insurance is only $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.
Texas also has catastrophe funds included in the insurance which states like Florida and California don't have.
But this comes as no relief to Texans who have seen their rates rise by double digits each year for some time now. Texans are angry and they are letting their elected officials know it.
Elected officials are aware of the discontent among the population. They are currently exploring ways to lower insurance rates or at least keep them in check. One proposal circulating will require larger insurers get the permission of the Department of Insurance to raise 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.
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.
Texas also has catastrophe funds included in the insurance which states like Florida and California don't have.
But this comes as no relief to Texans who have seen their rates rise by double digits each year for some time now. Texans are angry and they are letting their elected officials know it.
Elected officials are aware of the discontent among the population. They are currently exploring ways to lower insurance rates or at least keep them in check. One proposal circulating will require larger insurers get the permission of the Department of Insurance to raise 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.
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