AUSTIN, Texas — Progressive is the latest insurance company to stop offering homeowner coverage in parts of Texas due to the rise in weather-related disasters.
According to Texas insurance commissioner Cassie Brown, four other companies have ‘exited the Texas market’ this year regarding property and casualty insurance.
Brown, who testified at the Texas Capitol on Tuesday, says those exits impact 11,000 Texas homeowners.
“Several companies are making some decisions to not grow as fast in Texas as they have been in the past,” Brown said. “It could be that they are either increasing their deductibles. They may say this is a particular area of the state where we've seen a lot of losses. So we're not gonna grow as fast.”
According to Progressive's second quarterly reports, the insurance company claims 40% of their recent storm losses were in Texas.
“In 2023, there were $28 billion weather-related claims. So, the carriers just can't provide the capacity that they need to write everywhere,” said risk consultant Frank Barbella.
According to Barbella, insurance companies leaving Texas dramatically affects clients and other providers since it limits coverage and increases pricing capacities. Barbella said 100% of his clients have been affected and are seeing increases in their insurance renewals that are up to five times what they’re currently paying in just a year.
“It definitely concerns me," Barbella said. "An example would be ... Someone that we insured with a carrier that was paying around $2000, and the renewal from that same carrier with no claims went to $10,000 in one year."
Barbella said all of his clients are feeling the strain, seeing rate increases no less than 20% year after year.
Round Rock resident DeAnn Fraser said she felt that strain after a storm hit her home in 2022.
“Ended up being almost half a million dollars,” Fraser said. “So, it was a big claim.”
Fraser said they used the money to fix their home and put it on the market to sell. She said days before they closed on a deal, their provider denied their request to renew their homeowner's policy.
“Was I supposed to go outside and go, ‘Oh, tornado, could you miss my house and go to the left? Please, because otherwise my insurance is gonna drop me,'" Fraser said.
Fraser said she scrambled to get a new policy and paid double for it. She said seeing insurance companies leave Texas worries her.
“It’s gonna leave people uninsured or underinsured because they're gonna cut back on full coverage that they really need just to make it affordable, so they have something,” Fraser said.
Barbella said insurance follows the trend of inflation and believes insurance companies will eventually return to Texas.
“They're gonna look at their analytics and, if it makes sense for them to enter the state, they will from a profitability standpoint,” Barbella said.
Barbella predicts it may take up to two years for carriers to think Texas is a viable place to return to. Meanwhile, the Texas Department of Insurance said eight companies have been approved to enter the market already this year.
In the meantime, Barbella said customers should shop around for deals. He recommended getting ahead of your insurance renewal, sitting with an agent and going through coverage options and deductibles, to see if there are other carriers that you can get quotes from.
Editor's note: This article has been edited to more accurately reflect comments made by Texas insurance commissioner Cassie Brown during her testimony at the Texas Capitol on Tuesday and has removed a claim that Nationwide has exited the state of Texas. According to a spokesperson for Nationwide, the insurer still writes homeowner polices in Texas.
