As weather-related disasters continue to rise in Texas, four insurance companies have made the decision to stop offering homeowner coverage in parts of the state, impacting 11,000 homeowners, according to the Texas Department of Insurance.
Most recently, Progressive has joined the list of companies exiting the Texas market due to these challenges. Other companies, such as Nationwide, have also made similar moves this year, affecting homeowners across the state.
Texas insurance commissioner Cassie Brown testified at the Texas Capitol, explaining that these exits are a result of the increasing frequency and severity of weather-related claims in the state. Companies are adjusting their strategies by either limiting growth in certain areas or increasing deductibles to mitigate their risks.
Risk consultant Frank Barbella emphasized the strain on insurance companies, with recent storm losses in Texas accounting for 40% of Progressive’s claims. The total weather-related claims in 2023 reached $28 billion, leading carriers to reassess their capacity to provide coverage.
As a result, clients are feeling the impact of insurance companies leaving Texas, with significant increases in renewal premiums. Barbella noted that some clients have seen their premiums multiply up to five times within a year, creating financial strain for many homeowners.
One resident, DeAnn Fraser, shared her experience of facing a half-million-dollar claim after a storm damaged her home in 2022. Despite using the insurance proceeds for repairs, her provider declined to renew their policy just days before closing a deal to sell the house.
Fraser’s story highlights the uncertainty faced by homeowners in Texas as insurance options dwindle. The situation raises concerns about the affordability and availability of coverage in the state, potentially leaving many uninsured or underinsured.
Despite the challenges, Barbella remains optimistic that insurance companies will eventually return to Texas as market conditions evolve. In the meantime, he advises customers to explore different options and seek assistance from agents to find suitable coverage and affordable premiums.