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Texas Homeowners Insureance Crisis - Too little coverage for the money
Tuesday, 02 January 2007

Battling to lower homeowner's insurance rates
Texas has had the highest homeowners’ insurance rates in the nation...“Right now, that exposure is $40 billion. They have the money to pay for $1 billion in claims, that’s not enough,”...The way he sees it, the legislature has been allowing big insurance companies to cover less and less. Less coverage for mold or foundation damage and no coverage for floods, or in Galveston County, for wind.Those risks are now covered by government-backed programs.

Battling to lower homeowner's insurance rates

10:57 PM CST on Tuesday, January 2, 2007

By Dave Fehling / 11 News
If you own your home, you know how expensive it is to insure.

Texas has had the highest homeowners’ insurance rates in the nation.

With wind, rain and flooding, Houston is at risk.

But who’ll pay for the damage?

“The number one concern of the insurance industry right now is the threat of hurricanes,” said Mark Hanna of Austin.

Hanna speaks for the insurance industry and told us the current reserves in a state-backed hurricane fund couldn’t begin to cover the total damage from a big one hitting Houston.

“Right now, that exposure is $40 billion. They have the money to pay for $1 billion in claims, that’s not enough,” he said.

He says the upcoming session of the Texas legislature needs to find a solution but if that means higher rates, one homeowner says hold on

“I think what bothers me the most is we’ve been taken, we’ve been taken. They were slick,” said homeowner John Corbarruvius.

He owns a home in Clear Lake.

In 2001, I was paying about $750 a year. Now, I’m paying $1,500 a year,” he said.

He says he’s paying more but getting less, and he blames the Texas legislature.

“The laws that they’ve been passing benefit the businesses and that’s it, period. They are not passing any laws to help the consumer,” Corbarruvius said.

Corbarruvius is an engineer at NASA but spends many of his off hours haranguing lawmakers on behalf of homeowners.

The way he sees it, the legislature has been allowing big insurance companies to cover less and less. Less coverage for mold or foundation damage and no coverage for floods, or in Galveston County, for wind.

Those risks are now covered by government-backed programs.

“And of course, what happened to our rates? Nothing! We didn’t get a reduction in rates,” he said.

“Texas does have basically ever peril known to man,” said Craig Eiland.

Eiland is a state lawmaker, but one who has a reputation of challenging the insurance companies.

He says the companies want to stop covering hurricane damage not just in Galveston County, but the entire southern half of Harris County, forcing homeowners here to buy government backed policies for wind and floods and a third policy for theft and fire.

“They’ll have to pay more and probably have less coverage,”

“We have higher rates and we have less coverage. They cannot argue that point,” said Corbarruvius.

But the insurance industry does argue that point.

Its says, and state regulators confirm, that statewide, rates have dropped 13 percent since 2003 while rates in other coastal states have gone up.

“They’re going down, going down slowly, not fast enough for consumers like you and me who’d like a huge break but they’re going in the right direction,” Hanna said.

Homeowner Corbarruvius doesn’t buy it and plans to testify before lawmakers.         

They’ll have to weigh the evidence to see if insurance companies have it too easy in Texas, or if it’s as the companies contend, that Texas is one of the most disaster-prone states in the nation and therefore one of the hardest places for them to do business.


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