Rising Insurance Costs Challenge New Texas Homeowners
HOUSTON — Jonathan Leopold recently became one of Houston’s newest homeowners, achieving what he calls “the American dream.” However, he soon discovered that finding home insurance in Texas wasn’t as straightforward as he expected.
“You have to have home insurance that qualifies with the mortgage company. It was a little frustrating that I had to go shop multiple insurance agencies,” Leopold told KHOU 11 News. The process wasn’t just frustrating; it was also more expensive than ever before. “I’m going to say about 10 to 15% higher. Definitely. Yes. And in some areas even more,” said Melody Fontenot, owner of Jamel Insurance Agency.
As an insurance broker, Fontenot helps homeowners like Leopold find the coverage they need. She explained that Leopold isn’t alone in his experience. Many Texans have had trouble finding policies that fit their needs at affordable prices. “A lot of people are just being priced out,” Fontenot said.
The increasing number of natural disasters is a major reason insurance companies are raising rates. Areas hit multiple times by disasters face particularly challenging circumstances. “Primarily, on the flood-prone areas, if they have flooded in the past… they’re pulling out of that area,” Fontenot explained. This withdrawal of insurance companies from high-risk areas allows remaining companies to raise their rates even higher.
Fontenot also pointed out that Houston’s high number of rental properties and vacant homes contribute to the increase in homeowners’ insurance costs. Another factor is the consolidation of smaller insurance companies, either through mergers or going out of business due to financial instability. “Some of them may even actually go out of business and, or have to merge with, insurers that have better financial stability,” Fontenot said. This reduction in competition allows larger companies to set higher prices.
John Black, a lawyer representing homeowners against insurance companies, noted, “Insurance companies are charging more and giving less, covering less, and that creates a real tension.” This tension leaves homeowners struggling to find insurance at reasonable prices.
Leopold shared his approach to dealing with the challenging insurance market: “It is a process you have to go through to get that homeowners’ insurance. I just continued to shop and did not get discouraged.”
To help homeowners keep their premiums down, Fontenot recommends:
- Shopping around for new rates each year
- Improving your credit score, as better credit results in lower payments
- Using a broker, as they work with multiple companies to find the best rate
By following these tips, homeowners in Texas can better navigate the challenging insurance landscape.
