Houston homeowners face the risk of forgoing insurance due to ‘unsustainable’ rates — one resident reports paying $6,000 yearly with a $9,000 deductible. Here are three helpful tips if you’re feeling the financial strain.
When John Cobarruvias relocated to Clear Lake, Texas in 1989, it seemed like an ideal spot to raise a family. However, the soaring costs of home insurance now have him contemplating whether he can continue living there. “It used to be the perfect place for us and our children, and we never wanted to leave over the years,” he told ABC 13 Investigates. “It’s a wonderful area to reside in, but we are reaching a point where we will need to make some tough decisions. This continual rise in insurance rates is simply unsustainable.”
In 2000, Cobarruvias mentioned that he paid just $750 annually for home insurance with a $500 deductible. Fast forward to today, and he is facing a $6,000 yearly insurance bill with a $9,000 deductible, representing an 18-fold increase before any coverage kicks in. This challenging situation is not unique to him alone.
Recent analysis by 13 Investigates of data from the Texas Department of Insurance reveals that insurance rate hikes have more than doubled over the past decade. Many homeowners are now grappling with finding affordable coverage or contemplating going without any insurance at all.
The spike in rates can be attributed to various factors, including more frequent severe weather occurrences. Texas endured 20 billion-dollar weather disasters in 2024 alone, as per the National Centers for Environmental Information. Additionally, escalating construction and repair costs, fueled by inflation and surging material prices, have made home repairs pricier, leading to increased insurance premiums.
Ware Wendell, the executive director of Texas Watch, a non-partisan consumer advocacy group, points to Texas’ “file and use” system as exacerbating the problem. Wendell explained to ABC 13, “Under our current laws, insurance companies can start charging rates immediately without awaiting approval from the Department of Insurance due to this file and use system.”
Consumer advocates argue that the Texas Department of Insurance can only step in after the fact, a process they believe occurs too infrequently to curb excessive rate hikes. Some homeowners, like Robert Dempsey, have had their policies canceled as insurers retreat from high-risk regions. Securing new coverage from other providers has proven challenging for them.
For those remaining insured, like Cobarruvias, the decision to maintain coverage is under scrutiny. “My renewal is coming up in March, and I have a feeling that there might be a significant increase,” Cobarruvais told reporters. “If that happens, we may opt to go without insurance altogether.
“I’m not alone in doing this either.”Find out more: I am 49 years old and have not saved anything for retirement – what should I do? Don’t worry. Here are five simple ways to catch up quickly.
Three strategies to handle rising insurance costs
If your home insurance premiums are becoming too high, there are various steps you can take to reduce expenses.
1. Compare quotes from different insurers
Many homeowners stick with the same insurance provider for years, but comparing quotes can save you a significant amount of money. Obtain quotes from multiple companies, including smaller regional insurers.
2. Increase your deductible – if you can afford it
Raising your deductible can lead to lower premiums, but it is essential to ensure that you can afford the higher deductible. If you have enough savings to cover a $5,000 or $10,000 deductible in an emergency, it could result in a substantial reduction in your insurance costs. Just make sure you have the necessary funds to cover the deductible before making any changes.
3. Inquire about discounts on premiums
Many insurers offer discounts for home improvements that decrease risk, such as installing a security system or adding storm shutters. If you live in an area prone to fires, taking precautions like installing a metal roof or clearing brush from your property can reduce the risk of fire and potentially lower your premium.
Don’t forget to ask about discounts for bundling your car and home policies, making annual payments instead of monthly, using automatic payments, military service, or reaching retirement.
Additional reading:
Cybercrime cost Americans $12.5 billion in 2023 – how to avoid becoming a victim of fraud
Here are three items that Americans almost always overpay for – and quickly regret. Are any of these affecting you?
Safeguard your retirement savings with these five essential financial steps – most of which can be completed within minutes.
This article is for informational purposes only and should not be considered as advice. It is provided without any guarantee.
