May 2008

CONSUMERS WIN WITH INSURANCE COMPETITION

Since the Texas Legislature passed landmark insurance reforms in 2003, the Texas homeowners insurance market has stabilized. According to a recent Texas Department of Insurance (TDI) report:

• 29 more insurance companies are competing for business in our state;
• Insurers are offering many new choices of coverage rather than the old one-size-fits-all State-promulgated forms; and
• While Texas homeowners have seen home values go up and gas prices skyrocket, homeowners insurance rates have decreased an average of 13.5%.

Texas consumers today benefit from a more competitive insurance market, increased availability of insurance and lower rates, thanks to the reforms enacted by the Legislature, as the chart above illustrates. However, while the recent reforms have helped improve our competitive market, it is important for state policymakers to continue the movement towards a more predictable regulatory environment for rates to ensure Texans reap the benefits of a truly competitive marketplace.

Texas is on the threshold of a truly healthy homeowners insurance market for the first time in decades, even as insurance companies doing business in Texas continue to absorb some of the most severe weather losses in the country (already in 2008, severe weather outbreaks across Texas have cost more than a half billion dollars in insured losses and sparked thousands of claims). A competitive market serves the interests of consumers, insurers and the overall Texas economy that relies on available, affordable insurance for a healthy business climate.