Why Our Homeowner's Insurance Rates Are So High

What is being called a major coastal problem is keeping your homeowner's insurance rates the highest in the nation.

One of our local representatives, who also chairs the Texas House Insurance Committee, says we pay ten to 13 percent more in insurance than the rest of the country.

Damage from wind, hail, and tornadoes affects our rates, that we know.  But so does damage along the coast hundreds of miles away from the high plains.

Jerry Johns of the Southwestern Insurance Information Service, which represents the insurance industry in Texas, says, "that has prevented companies from coming into the state and prevented companies here from writing more business."

Keeping competition low, and rates high.  Texas Rep. John Smithee says, "what iIve tried to do in the last three sessions is separate the coastal exposure from the rest of the state. If we do that, Texas becomes a very manageable insurance market and our rates will subside a great deal."

Maybe even by ten percent, which Smithee says would put us on par with the rest of the country.

His legislation being considered would offer at least a temporary solution to the coastal problem when a storm hits.  He says, "we would borrow the first layer, about $1 billion from the Texas Rainy Day Fund and it would be paid back by coastal policy holders over the next few years."

Smithee says that would be enough to cover a $3 billion storm and could entice more companies to write insurance in Texas.

Another bill in front of lawmakers right now would make the state's insurance commissioner an elected position, making him accountable to Texans.  Right now, the governor appoints someone to the post.