With annual premiums at $1,745 a year on average, Texas is the third most expensive state for homeowner’s insurance behind Florida and Louisiana, based on data compiled by the Texas Department of Insurance.
The department found that the state’s average premium price for a homeowner’s insurance policy increased by more than 26% between 2010 and 2014.
Costs are expected to rise even further. Mark Hanna, Insurance Council of Texas spokesperson, shared his observations.
“Texas is just a violent state when it comes to weather. We literally have just about all of the different catastrophes that could occur,” he said. “There is a good chance that your rates may have gone up because of all the other damage.”
According to a report by the Texas Department of Insurance, insurance companies in Texas paid nearly $1.8 billion to compensate homeowners in just the first half of 2015.
“Any single weather event does not directly impact our insurance rates,” stated Jerry Hagins, of the Texas Department of Insurance.
The department must approve any increase to premium prices. Hagins said insurance companies look back at the past decade or two to determine the average of insured losses. Premium prices are based on the average cost of disasters and are adjusted to account for the likely costs of future disasters. Hagins confirmed that the state and insurance companies foresee a lot of severe weather, but that weather events tend to even out over time.
