Battling to lower homeowner's insurance rates
Texas has had the highest homeownersâ insurance rates in the nation...âRight now, that exposure is $40 billion. They have the money to pay for $1 billion in claims, thatâs not enough,â...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 homeownersâ insurance rates in the nation.
With wind, rain and flooding, Houston is at risk.
But whoâll pay for the damage?
âThe number one concern of the insurance industry right now is the threat of hurricanes,â said Mark Hanna of Austin.
Hanna speaks for the insurance industry and told us the current reserves in a state-backed hurricane fund couldnât begin to cover the total damage from a big one hitting Houston.
âRight now, that exposure is $40 billion. They have the money to pay for $1 billion in claims, thatâs not enough,â 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
âI think what bothers me the most is weâve been taken, weâve been taken. They were slick,â said homeowner John Corbarruvius.
He owns a home in Clear Lake.
In 2001, I was paying about $750 a year. Now, Iâm paying $1,500 a year,â he said.
He says heâs paying more but getting less, and he blames the Texas legislature.
âThe laws that theyâve been passing benefit the businesses and thatâs it, period. They are not passing any laws to help the consumer,â 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.
âAnd of course, what happened to our rates? Nothing! We didnât get a reduction in rates,â he said.
âTexas does have basically ever peril known to man,â 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.
âTheyâll have to pay more and probably have less coverage,â
âWe have higher rates and we have less coverage. They cannot argue that point,â 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.
âTheyâre going down, going down slowly, not fast enough for consumers like you and me whoâd like a huge break but theyâre going in the right direction,â Hanna said.
Homeowner Corbarruvius doesnât buy it and plans to testify before lawmakers.
Theyâll have to weigh the evidence to see if insurance companies have it too easy in Texas, or if itâs 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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