Houston Homeowners Weigh Insurance Costs Against Coverage
Clear Lake, Texas (KTRK) — Homeowners in the Houston area are facing increasingly unaffordable home insurance rates, with some considering the drastic step of forgoing coverage altogether.
John Cobarruvias, a Clear Lake resident since 1989, shared his struggle with 13 Investigates. “It’s a great place to live, but we’re getting to a point where we’re going to have to make some decisions. This increase in insurance can’t continue. It’s unsustainable,” he said.
Cobarruvias’s insurance costs have skyrocketed. In 2000, he paid $750 annually with a $500 deductible. Now, he pays $6,000 per year with a $9,000 deductible. His rates have increased by 25% annually for two consecutive years.
Rising Rates
A 13 Investigates analysis of Texas Department of Insurance data shows that insurance companies are raising homeowners’ insurance rates more frequently than a decade ago, but the state has done little to stop them.
Ware Wendell, executive director of Texas Watch, a consumer advocacy group, explained a key issue. “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 which allows them to file their rates and start using them immediately,” he said.
“We’re not seeing that the TDI is doing that very often.”
–Ware Wendell, executive director of Texas Watch
Wendell pointed out that a “prior approval” system would allow regulators to prevent overcharges before they take effect. He also cited frequent severe weather events as a contributing factor to the insurance crisis. He noted that Texas experienced 20 severe weather events last year, costing over $20 billion.
Factors Driving Up Costs
Wendell explained that these factors increased the cost of home insurance. “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,” he said. “If lumber costs more, then the insurance that you buy to protect your home is going to cost more.”
Robert Dempsey, also a Clear Lake resident, described his experience. After his insurance company left Texas, he struggled to find 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,” Dempsey stated.
Texas FAIR Plan Association
Many are turning to the Texas FAIR Plan Association, created by lawmakers to provide insurance to those denied coverage elsewhere. At the end of 2024, the FAIR Plan had 61,774 policies in Texas, with thousands more in surrounding counties.
Cobarruvias is considering dropping his coverage. “If that happens, we may just forego insurance completely, and I’m not the only one doing that either,” Cobarruvias said. He has only filed two claims in 30 years. For some homeowners, the rising costs leave them with no other option.
“They’re stuck,” he said. “It is a problem affecting every single one of us.”
