13 Investigates: Houston area homeowners risk ditching insurance amid 'unsustainable' rates

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Monday, February 24, 2025 10:48PM CT
CLEAR LAKE, Texas (KTRK) -- John Cobarruvias fell in love with his Clear Lake neighborhood when he first moved there with his family in 1989.
"It was just a perfect place for us and our kids and over the years, we just didn't want to move," he said. "It's a great place to live, but we're getting to a point where we're going to have to make some decisions. This increase in insurance can't continue. It's unsustainable."
This increase in insurance can't continue. It's unsustainable.
Back in 2000, Cobarruvias said he paid just $750 a year for his home insurance, which had a $500 deductible. Now, he said he's paying $6,000 a year with a $9,000 deductible and the increases keep piling up.
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For two years in a row, Cobarruvias said his home insurance company raised his rates by 25% annually and 13 Investigates found he's not alone.
A 13 Investigates analysis of Texas Department of Insurance data shows the number of times insurance companies raised homeowners' insurance more than doubled over the last decade. The state found no issues with a majority of the increase requests it reviewed over the last decade.
Ware Wendell, executive director of Texas Watch, a non-partisan group that advocates for consumers, said part of the problem with the insurance industry is how the system is set up.
"The insurance companies don't have to wait for approval from the Department of Insurance before they start charging rates under our current laws because we've got this file and use system which allows them to file their rates and start using them immediately," Wendell said. "It's up to the Department of Insurance if they identify an overcharge, to then challenge that... We're not seeing that the TDI is doing that very often."
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Wendell said one solution to minimize overcharges would be to stop them before they start using "prior approval" versus a "file and use" system.
Wendell said more frequent and severe weather events aren't helping the insurance crisis.
According to the federal government's National Centers for Environmental Information, Texas experienced 20 severe weather events last year alone, from droughts to severe storms and tropical cyclones. Those events combined cost more than $20 billion.
"The cost of materials and labor is going up and up. Inflation is not coming back under control the way that we hoped that it would, so that's a factor as well in terms of how much we're paying for insurance. It has this knock-on effect," Wendell said. "If lumber costs more, then the insurance that you buy to protect your home is going to cost more."
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While we want insurance companies to make a reasonable profit in the state, we don't want them to make an excessive profit with a product that we are forced to buy.
Wendell said many factors go into calculating a fair insurance rate for consumers, including the company's losses and the trends it's seeing in the cost of labor and materials.
Article from:
https://abc13.com/amp/post/13-investigates-houston-area-homeowners-risk-ditching-insurance-amid-unsustainable-rates/15951904/

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