It’s true – homeowners insurance costs more in Texas. While everything may be bigger in Texas – that shouldn’t apply to insurance. Well, the bad news is – it does.
And, not just to homeowners insurance. It’s sort of a double-whammy. According to the latest data resulting from an analysis presented by the Texas Department of Insurance, the higher cost isn’t isolated to homeowners insurance, but includes auto insurance policies as well – especially in the northern parts of the state – where rates are becoming more expensive.
Conducted by the Dallas Morning News, the analysis looked at the rates being charged throughout eight specific ZIP Codes within the city of Dallas by as many as 30 separate homeowners insurance companies, and the outcome was quite surprising. As it turned out, it was determined that people living in those designated areas experienced average increases this year of between 9 and 12 percent…with little indication of what 2015 might bring.
Furthermore, the same study showed that auto insurance rates within those identical areas had an average premium increase of 11 to 53 percent, this year alone. While auto coverages had remained somewhat more stable than property policies in previous years, it’s obvious that this past trend has apparently reversed itself in 2014.
That being said, rates, as well as the increases, varied widely from one insurance company to another, when comparing both home or auto coverages. But, taking inflation into account, the increases within the area of the eight ZIP Codes, have been quite significant.
Case in point, from 2008 through the middle part of 2014, the cumulative inflation rate in the United States was 10.5 percent. However, insurance rates in some parts of Texas for both auto and property premiums have risen by nearly that much in the past year.
Insurance industry representatives have explained that there are a variety of reasons for the higher premiums. According to those representatives, the increases are justified due to the fact that costs associated with damage claims are rising sharply. They state that the price of replacing or repairing a roof on a house is notably higher than now it has been because of increases in labor and building material costs, some of which are directly related to the price of oil or other foundational elements used.
The same can be said for auto insurance policies. Insurance companies stand behind their claim that higher labor and material costs have to be offset by increases in premiums in order to continue to serve consumers at a high level. Of course, that conclusion is entirely subjective as the policy holder is the one footing the bill every month to protect his home and his vehicle. And, any major increase can be a hardship if the rate hike is substantial.
One thing to keep in mind is – insurance companies not only offer numerous discounts to lower costs for both homeowner and auto insurance premiums, but also to retain you as a policy holder. Look into taking advantage of these discounts by bundling policies together, such as home and car, boat, multiple car, and business.
In addition, do your research and claim any and all discounts you qualify for. If you’re not sure, ask. It’s free.
Are you being affected by the higher auto insurance or homeowners insurance rates in Texas? Feel free to share your thoughts in the comments section below.