Houston Homeowners Struggle with Soaring Home Insurance Costs
CLEAR LAKE, Texas (KTRK) – Houston-area homeowners are grappling with rapidly escalating home insurance rates, prompting some to consider the previously unthinkable: forgoing coverage altogether. 13 Investigates has found that residents are facing unsustainable increases, raising concerns about the financial burden on families and the potential consequences of going uninsured.
John Cobarruvias, a Clear Lake homeowner since 1989, shared his frustration. “It’s a great place to live, but we’re getting to a point where we’re going to have to make some decisions,” he said. “This increase in insurance can’t continue. It’s unsustainable.”
Cobarruvias’s insurance premiums have skyrocketed. He stated that in 2000, he paid $750 annually with a $500 deductible. Now, he’s paying $6,000 per year with a $9,000 deductible, and the increases continue.
“The cost of materials and labor is going up and up. Inflation is not coming back under control the way that we hoped that it would, so that’s a factor as well in terms of how much we’re paying for insurance. It has this knock-on effect,” shared Ware Wendell, executive director of Texas Watch. “If lumber costs more, then the insurance that you buy to protect your home is going to cost more.”
Rate Increases on the Rise
13 Investigates’ analysis of Texas Department of Insurance data shows the frequency of home insurance rate hikes has more than doubled in the last decade.
For two consecutive years, Cobarruvias’s insurance rates rose by 25% annually. Another resident, Robert Dempsey, also faces challenges. A few years ago, his insurance company left the state and declined to renew his policy. Dempsey described the difficulty of finding affordable coverage. “A lot of the companies that we contacted just said they were not writing policies in this area, and then those that were, the prices tend to be really, really high,” he explained.
The Role of the Texas FAIR Plan
When traditional insurance proves unattainable, some homeowners turn to the Texas FAIR Plan Association, established by lawmakers to offer property insurance to those denied coverage elsewhere. At the end of 2024, the FAIR Plan covered 61,774 policies across Texas, with a significant presence in Harris County.
“While we want insurance companies to make a reasonable profit in the state, we don’t want them to make an excessive profit with a product that we are forced to buy.”
– Ware Wendell, executive director of Texas Watch
Concerns about the Current System
Ware Wendell from Texas Watch points to flaws in the current system. He explained that under the state’s “file and use” system, insurance companies can begin charging new rates immediately without prior Department of Insurance approval, potentially leading to overcharges. “The insurance companies don’t have to wait for approval from the Department of Insurance before they start charging rates under our current laws because we’ve got this file and use system,” he said.
Severe Weather and Rising Costs
The rise in severe weather events, according to Wendell, contributes to the insurance crisis, and data from the federal government’s National Centers for Environmental Information shows that Texas experienced 20 severe weather events in 2024 alone. These events, including droughts, storms, and tropical cyclones, resulted in over $20 billion in damages.
Cobarruvias, who has only filed two claims in 30 years, is now considering dropping coverage altogether. “If that happens, we may just forego insurance completely, and I’m not the only one doing that either,” he said. He and others are weighing the risk of financial ruin due to a disaster against the certainty of high, and likely increasing, insurance premiums.
Cobarruvias summed up the situation, saying, “They’re stuck… It is a problem affecting every single one of us.”
