The wildfires raging across Los Angeles right now feels far away. Unfortunately, the devastation will reach Texas and beyond. Many homeowners insurance companies that pay for disasters like wildfires and hail operate across the United States. One question that people ask the agents at Insurance For Texans is if these behemoths of the insurance industry will adjust their insurance rates, rules, and coverage here in our home state of Texas.
We have bad news. There is an insurance crisis that extends beyond the Santa Monica Mountains. Changes will continue to ripple into the Texas homeowners insurance market affecting homeowners who may never face a wildfire themselves. If you’re wondering how these far-off fires could change your home insurance policy, here’s what you need to know to protect your home and wallet.
Home Insurance Costs Are Rising Across the Board
The more large-scale disasters that happen across the country, the more insurance companies have to pay out in the claims process. Th cost of claims don’t stay local though. When wildfires in California cause billions of dollars in damages, Texans will feel this through higher premiums. People always want to know why
What makes average premiums rise nationwide is the rising cost of reinsurance. Reinsurance is the safety net the big insurance companies buy to cover massive claims from events like wildfires, tornados, and hurricanes. Think of it as insurance that the insurance carriers purchase for themselves when they sell you a homeowners policy.
Reinsurance costs have skyrocketed as natural disasters have become more frequent and severe. With the California wildfires being a new record for the cost of a catastrophic event, those reinsurance payouts will break the bank. And we all know by now that the insurance don't just absorb those economic losses. They pass them on to those paying the reinsurance premiums.
Texans in high-risk areas like those prone to hail, hurricanes, or tornados, are especially likely to see steeper rate increases because their homes already represent a bigger potential loss for insurers. The increased costs of reinsurance will stretch an already tight cost of insurance.
Finding Insurance Is Becoming Harder
In California, some insurance companies have stopped offering policies in wildfire-prone areas altogether. Texas has seen some companies leave the state, and it’s clear that insurance companies are becoming more selective about whom they will cover. This means fewer options, especially for certain types of homes.
For Texans with homes valued between $800,000 and $2,000,000, the insurance market is getting especially tight with a very small set of companies offering policies for homeowners in this range. These homes generally have large roof lines with expensive shingles, providing and increase of risk from hail claims for insurance companies. As a result, homeowners in this price range are struggling to find new policies, even if their homes are located in areas that aren’t traditionally high-risk.
Additionally, some companies are limiting the number of new policies they write each month regardless of value. This has made it more challenging for first-time buyers or people trying to switch insurers due to premium increases. It has created massive frustration for many Texas homeowners.
If you’re in this position, you might find yourself turning to specialty insurance or a surplus lines insurance company. While it has definitely become a solution for many, this type of insurance coverage often comes with higher premiums and less favorable terms. This is why it’s more important than ever to understand your options and work with an independent agent who knows the Texas property insurance market inside and out.
More Risk Is Being Shifted to Homeowners
Finally, there is another way insurers are adapting to increased payouts in the claims process. They are making Texas homeowners take on more of the financial risk of property coverage. This limited coverage on your home means you might face much higher costs when you file a home insurance claim. Policies are being rewritten to include higher deductibles, reduced payouts, and more exclusions than ever before.
For example, wind and hail deductibles in Texas are climbing, leaving homeowners with bigger out-of-pocket costs before their insurance kicks in. Some insurers are also excluding or limiting coverage for certain types of damage, like cosmetic hail damage. If your roof is more than 10 years old, you may find yourself dealing with a roof payment schedule, where insurance companies pay only the depreciated value of your roof instead of the full cost to replace it. These changes mean you could be left footing the bill for a significant portion of the repairs after a major storm.
Homeowners need to be aware that insurance companies are no longer offering the same basic level of protection they used to. This makes it even more important to carefully read your policy, plan for higher out-of-pocket costs, and adjust your coverage to match your needs. A larger insurance bill is something you may need to find a way to pay if it has the additional coverage to make sure your asset is protected.
How Texans Can Protect Themselves
The shifting property insurance market landscape may feel overwhelming, but you have options to stay protected. Start by reviewing your current policy with your independent insurance agent. If you don't have one, understanding coverage issues is going to fall on your shoulders.
Look beyond just the premium and understand what’s covered, what’s excluded, and what your deductible will cost you if you file a claim. Knowing these details can help you avoid surprises that can come from the unavailability of insurance coverage being offered.
Next, think about ways to make your home less risky. Upgrading your roof, installing impact-resistant windows, or adding storm shutters can reduce your chances of significant damage and may even earn you discounts on your policy. These small steps can save you money in the long run and give you peace of mind during storm season.
Finally, work with an expert who knows Texas. True Texas Home Insurance is available only through Insurance For Texans. It is designed to meet the unique challenges of owning and covering a home in this great state we call home. From understanding your total cost of risk to finding policies that cover what matters most, the team at Insurance For Texans works for you rather than some big insurance company. Their independent agents can help you find a policy that works with your budget and gives you the coverage you need to weather Texas’s unpredictable climate.
While Texas homeowners may not face wildfires, California’s disaster season is shaping the insurance market nationwide. With rising premiums, fewer policy options, and higher out-of-pocket costs, it’s important to act now to protect your home and your finances. True Texas Home Insurance is here to help you navigate these changes and feel confident in your coverage.
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