NewsChannel 10 Investigates: Spike in homeowners Insurance rates - KFDA - NewsChannel 10 / Amarillo News, Weather, Sports

NewsChannel 10 Investigates: Spike in homeowners Insurance rates

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AMARILLO, TX - Texas ranks third in the nation when it comes to having the highest homeowners insurance rates and residents are now beginning to feel the pinch.

A new report released from the Texas Department of Insurance says rates have increased 21-percent since 2009.

Finding out exactly what was behind the increase took several days of research because insurance agents were turning their head the other way when we asked them for an explanation.

You'd expect insurance agents to be able to discuss insurance rates, but that has proven to be difficult.

State Farm's corporate office in Austin informed us they didn't have any knowledgeable agents in the entire Texas Panhandle who could talk to us about the state's report showing a steep increase in premiums over the last 3 years.

We also put in calls into the Allstate located at 3913 Bell St., but the secretary who answered the phone had no idea what we were talking about and said she didn't know anyone who knew about the increase.

Texas Insurance located at 1700 E. 16th St. also knew nothing about increased rates.

"The company doesn't want them speaking for the company on matters of rates and so forth so that's why there is probably some reluctance," Rep. John Smithee explained.

Smithee is the Chairman of the House Insurance Committee. He's well aware of the state's report, and says it doesn't surprise him. However, what drives up your rates may surprise you!

"The real load factor is a hail storm," Smithee said. "People assume it's tornadoes but it's really hail storms because that damage can we so widespread and so expensive."

The latest hail storm this year hit Lubbock back in June. While the north and northeast parts of Texas pay for tornado and hail damage, you're still having to pick up the pieces for the devastation that strikes the southeast coast.

"Hurricane Ike produced quite a bit of damage along the southeast Texas gulf coast including Galveston and the Houston area," Justyn Jackson with the National Weather Service said.

Ike caused billions of dollars in damages, and you're paying for it.

"It's something I've been working on for 15 years of trying to somehow detach the rest of the state from the tremendous exposure that the companies are subjected to in the coastal areas," Smithee said.

That's one of the biggest factors Smithee says has resulted in increased rates. He believes rates would decline if we didn't have the burden of dealing with coastal disasters. More importantly, he says the state needs to keep a close eye on insurance claims when catastrophic events occur.

"Insurer's can take advantage of a situation here in Texas and write premiums a little higher than they should, or significantly higher than they should," Smithee said. "We've got to be real vigilant to make sure that's not happening."

There are ways to save on insurance rates. One of the easiest ways to shrink your bill is by bundling homeowners insurance with auto insurance. However, if you're still not happy with your rate, it pays to shop around. 

There are more than a dozen home insurance carriers in the Amarillo area.