It happened in Florida following devastating hurricanes ravaged their state. The same in Louisiana following the unthinkable damage left in the wake of Hurricane Ida. Again, it would take place in California following wildfires. Now, in 2023, insurance companies pulling out of Texas has become a reality.
Some of the homeowners and motorists that need them the most in the Lone Star State are going to find increased difficulty finding insurance moving forward. This comes as major and minor carriers continue to assess risks and evolve to new weather trends.
Virtually nothing that goes into restoring a loss is getting cheaper. There is typical inflation to deal with but also much more than this increasing prices. Carriers are making business decisions and if you aren’t prepared, you could find yourself in a tough place when looking to protect your home or vehicle.
However, among all the doom and gloom, there are still options. Even as nationwide insurance carriers leave Texas, understanding how to keep your premiums low is important in order to ensure you don’t only find coverage but aren’t forced to overpay for it either. Learn more below.
Notable Insurance Companies Pulling Out of Texas To Protect Against Risk
With more and more insurance companies pulling out of Texas, this can bring a variety of uncertain feelings to residents. At the heart of it all is the very operations of insurance carriers, not too unlike the general operations of any other business.
When you enroll in home insurance in Texas, you’re going to be assessed for the risk you pose as a client. This is true for any insurance, but seeing as homes are often the most expensive type of property and casualty coverage homeowners need, it’s important to put it into perspective.
There are a lot of factors that go into play here, but here are some of the core metrics each carrier is going to look at when writing you a policy:
- The location of your home.
- Your home’s age.
- Personal factors, such as your claim’s history and credit score.
- The building materials your home uses, its size, and the general cost of rebuilding your home after a major loss.
If you dig deeper, you’ll find many more, but the main focus is the cost of restoring your home after a major or total loss. An obligation that becomes much more costly when you live in an area prone to destruction.
Specifically, when you have a sizable number of losses to contend with. Having to restore a single home due to a fire is never ideal, but it’s a lot more manageable as an occasional risk rather than insuring many homes in an area of particular risk, such as homes along the Gulf Coast.
You’re going to find risks anywhere you live, particularly in Texas. There are several weather events that can affect your home or vehicle no matter where you call home. However, those living in the Gulf region and in North Texas have a specific risk of windstorm damage.
Hurricanes are the most costly natural disasters in U.S. history and it’s not even close. You’ll notice that according to Kiplinger, of America’s top 11 costliest events, nine of them are hurricanes. This includes the top eight on the list.
What this means is that no matter how you slice it, hurricanes present a very real threat to residents and carriers alike. To make matters worse, the trend of seeing an insurance company leaving Texas is only expected to get worse.
In Texas, Difficulty Finding Insurance Could Continue
The frequency with which hurricanes affect the East and Gulf Coasts continues to increase. Hurricanes and tropical storm conditions are on the rise, according to Princeton University. Combined with the fact that hurricanes are the costliest cause of home damage, it’s no wonder carriers are reacting.
Texas gets hit by hurricanes more than any other Gulf Coast state besides Florida. There is a lot of land geography to cover and the eastern portion of the state holds more of the population than the western. The Lone Star State is also second in terms of population.
Building a home in Texas may not be the costliest endeavor when you look at the entire country, however, you’re still going to pay a sizeable amount to do so. Furthermore, inflation is raising the costs of labor and materials.
As if these conditions aren’t unfavorable enough, the trend of increased hurricane activity isn’t looking like it’s going to reverse any time soon. Some of the hottest days in Texas history occurred in 2023 and even if future years don’t surpass, the conditions remain.
Hotter temperatures create the ideal situation for a hurricane or tropical development. Warmer waters are favorable for tropical storms and hurricanes. Therefore, as long as temperatures remain elevated, the more you’re going to see an increased threat from such weather events.
At the end of the day, the insurance company leaving the state of Texas is a business decision. Without having the right business conditions, more and more carriers are left to explore other options to remain profitable.
For example, if a hurricane affects millions in the Gulf Coast or in the Dallas area, and a carrier has thousands upon thousands of claims to fix, several problems present themselves:
- The sheer cost of doing so multiplies at a rate that can make the business unprofitable even with raising premiums.
- Inflation isn’t the only thing that can raise prices. Labor and materials can also increase due to supply and demand and the time it takes to fulfill a job. All things that are negatively affected when there are several claims to fulfill rather than a smaller number.
- When it comes to flood damage, you’ll need flood insurance in Texas when it comes to your home. However, for drivers, many have comprehensive coverage that covers weather events, including flooding. This can be a costly claim when flooding rains and storm surges cause problems in a region.
How To Protect Yourself From Insurance Companies Pulling Out of Texas
The idea of an insurance company leaving Texas is becoming much more common and the result means fewer options and it could mean higher premiums. Sadly, those most affected will be those who need protection the most.
Homeowners and drivers with fewer options have a problem. This is because while there are many different factors that each carrier will assess, they’re also going to do so differently. While this presents an opportunity for residents, it can also be a problem as carriers leave an area. Here’s why:
- Bundles are important as are discounts. However, if you’re going to maximize your savings, you’re going to need to compare your rates among different carriers.
- Remember, different carriers assess things in their own way. Therefore, shopping around is your best option.
- But if you have fewer options to choose from this means your scope of shopping can be more difficult without the right help.
Thankfully, Freedom Insurance Group has been partnering with a variety of top-rated insurance carriers for protection, such as auto insurance in Texas. By doing so, we’re able to connect you with companies committed to helping residents of the Lone Star State through thick and thin.
Our partnerships not only allow us to help you find the lowest price but also help you have the security that comes with working with a broker representing multiple brands. In the event you experience a rate increase or an issue with your carrier, we’re here to help you maintain coverage at the lowest rate possible.
On average, we’ve helped Texans save 40% on their premiums and continue to do so throughout the entire state. However, we are headquartered in the heart of North Texas with a long-standing connection to the Gulf Coast.
We understand the needs of the regions, particularly at this time, when there are increased weather threats and economic conditions residents continue to face. Because we work with multiple brands and have roots in Texas, you can be sure, we’re here for the long haul.
To save money through a reliable team you can trust, give us a call today or get a free no no-obligation home insurance quote or auto insurance quote online. Though insurance companies pulling out of Texas continue to threaten our state, we aren’t going anywhere!