2016 Loss Facts

  • Residential property damage for the first half of 2016 topped $4 billion – largely due to hailstorms (Insurance Journal)
  • San Antonio alone accounted for more than $2 billion (3 hailstorms, including costliest in Texas history)
  • Amount does not include: auto or commercial claims or flood damage (covered by federal flood insurance)
  • $4 billion exceeds annual homeowner wind/hail losses recorded every year but one (2008/Hurricane Ike) in the past 20 years (TDI data)

The Texas Department of Insurance (TDI) aggregates loss data for the Texas homeowners insurance market. The most recent reported data shows that in 2015, for every $1 in premium collected by companies writing homeowners insurance in Texas, insurers paid out 53 cents in losses. After adding in the expense of doing business – agent commissions, loss adjustment expenses, overhead, administrative costs, etc. – insurers paid out nearly 90 cents in claims and expenses for every $1 in premium collected.

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When reviewing these types of metrics for homeowners insurance, it is important to look at them over a longer period of time. Weather related disasters are the biggest cost drivers today in the insurance marketplace, and one weather catastrophe can wipe out years of profit. Insurers predict for and prepare for risk, especially in Texas, with the most diverse severe risk in the country with exposure to nine different types of natural disasters.  A long-term look at premiums and losses is vital to understanding the realities of the market and the right rates for insurance in Texas.

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