As North Texas residents awake the morning after the year’s first tornado strike in the Dallas-Fort Worth region, the issue of homeowners insurance is likely to be on the minds of many.
Last night, severe weather injured at least five people in the DFW area. Hail the size of grapefruits caused massive damage in Denton, while areas such as Frisco and Farmersville saw softball and golf ball-sized hail.
Meanwhile, severe winds battered much of Hunt County and Hopkins County, with tornadoes touching down and destroying homes and commercial properties alike in Greenville and Celeste.
This, just two days after it was revealed that 2013 was a remarkably profitable year for home insurance companies in Texas.
Overall, companies such as Allstate, Farmers, and State Farm collected a total of $6.8 billion in homeowner premiums according to the Texas Department of Insurance, yet they paid out only $3 billion for insured losses.
This represents an average 44.8 percent “ratio loss.” Generally, anything under 60 percent is considered a healthy profit.
According to consumer advocate groups including Texas Watch, a large reason for the insurance industry’s huge profits last year is the fact that while the cost of insurance has grown, the coverage included in property owners’ policies has decreased. As an experienced real estate insurance claims attorney, I know that getting the insurance company to pay the full and fair amount of compensation you are actually due is incredibly difficult. These number only help to illustrate this fact.
And yet all three major insurance companies are looking to increase their premiums this year. Data revealed by the Texas Department of Insurance reveal that Allstate saw a 2013 profit loss of just 393 percent, but is seeking a 2014 rate hike of 6.5 percent. The respective figures for Farmers are 49.7 percent, with a 14.9 percent increase; while for State Farm it is 40.2 percent, with a 9.8 percent increase. In order for the insurance companies to actually charge these proposed increases, however, the insurance department must approve the new rates.
As a Texas property owner, all of this information is important for you to know. Especially since Texas already has the third-highest homeowner rates in the nation, according to the National Association of Insurance Commissioners.
So if your home or business property suffered hail or wind damage overnight, brace yourself for a hard fight with your own insurance company. Even though roof damage will likely be the most common form of damage in the area, it does not mean that the insurance company will willingly pay you what you deserve in order to get all repairs properly taken care of.
Be sure to get a second opinion on the full extent of the damage from a licensed contractor not affiliated with the insurance company.