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Homeowners insurance

An awful lot of attention gets paid to property taxes and the rate at which they rise due to higher appraisals. There are other variable costs to home ownership, however, and one of them is homeowners insurance.

As a result of a dramatic increase in mold claims prior to 2003, homeowner insurance rates were pushed to record heights. In response, legislators in the 78th Legislature passed SB 14, which, among other things, moved Texas to a “file and use” system.

Previously, rates were established by the Commissioner of the Texas Department of Insurance, and companies had to petition the department for approval to raise their rates above the established level. However, a loophole allowed most companies to shift their policies outside of the regulations, meaning consumers still saw high premiums.

The “file and use” system passed in 2003 did little to alleviate the problem. Under the new system, insurance companies were simply required to inform the department of a rate change before they implemented it. The department had no mechanism to regulate insurance companies as they implemented premium rates.

Texas homeowners have failed to see any significant relief from the rates that were in place prior to 2003.

And that’s without taking into account utility rates and flood/windstorm insurance for those who need it, which have also been rapidly rising. Sure would be nice to see some of this addressed in the next legislative session, wouldn’t it? Having a Governor that cares about the issue would help, too. EoW and BOR have more.

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