Texas Homeowners Face Rising Insurance Denials Amid Storms

News Summary

In Texas, nearly half of homeowner insurance claims were denied last year, raising concerns over affordability amidst severe weather. The rising closure rates, now at 47%, have escalated financial burdens on property owners. Despite attempts to reform the system, homeowners struggle with increased premiums and reduced coverage. Many are hesitant to dispute claims, having faced significant out-of-pocket expenses after storms damaged their properties. As severe weather continues, the call for reform in the insurance sector becomes more urgent.

HOUSTON, TX — Homeowners in Texas are increasingly facing insurance denials, with nearly half (47%) of homeowner claims closed without payment in the last year, as reported by Weiss Ratings. This troubling trend poses significant financial challenges for property owners, particularly in the wake of severe storms that have caused extensive damage and power outages across the region, with recent storms on May 16, 2024, causing further roof repairs in northeast Houston.

The statistics reveal a stark increase in unpaid claims, up from 35% in 2016 and surpassing the national average of 42%. The situation has drawn criticism from various analysts and experts, some of whom describe the claims closure rate as “appalling.” Insurance companies in Texas are also raising premiums at alarming rates, leaving homeowners struggling with affordability while frequent severe weather events continue to impact properties.

Despite efforts from state lawmakers to address rising home insurance costs, significant reforms aimed at protecting homeowners have not progressed this year. Instead, insurers are changing their policies by reducing the types of damage covered and increasing deductibles. These tactics compel homeowners to shoulder more out-of-pocket expenses, making it tougher for them to file claims effectively.

A report highlighted that a group of 10 insurers in Texas closed more than half of their claims without making payments. Notably, companies such as Lemonade Insurance and Spinnaker Insurance recorded closure rates exceeding 60%. Other insurers, such as Allied Trust Insurance and Allstate, have contested these findings, claiming they misrepresent the situation by not considering the varying customer coverages in the analysis.

Many homeowners are now reluctant to challenge denied claims, especially following the implementation of a law in 2017 that made it increasingly difficult to dispute claim denials. This environment is prompting homeowners like Regina Johnson to walk away from claims due to considerable deductibles; her claim was dismissed after she failed to meet a $4,800 deductible post a derecho storm.

Further complicating matters, some homeowners, like Danita Mullins, have incurred hefty expenses. Mullins was forced to spend $17,000 out-of-pocket after her roof claim was denied following differing assessments. As insurers shift their focus away from providing protective products towards compliance-focused offerings, many Texas property owners are left feeling vulnerable.

The Texas Department of Insurance (TDI) does allow homeowners to formally file complaints against unfair claim denials; however, awareness of this option is limited. Reports indicate that denial rates have escalated significantly since the 2017 law was enacted, which was originally designed to prioritize insurer protections, inadvertently limiting consumer rights.

In the current landscape, the insurance industry faces scrutiny as concerns mount over their practices. There are suggestions that some insurers are employing strategies like delaying claim payments, denying claims outright, and mounting robust defenses against potential litigation. These alarming practices could contribute to the ongoing financial burdens faced by Texas homeowners.

As climate change fuels an increase in severe weather events, homeowners across Texas must grapple not only with rising claims denials but also with the ever-increasing costs associated with homeowner’s insurance. The current insurance landscape inspires a profound need for meaningful reform to ensure fairness and protect the interests of property owners in the state.

Deeper Dive: News & Info About This Topic

HERE Resources

Texas Prepares for 2025 Hurricane Season Predicting Active Storms
New Disaster Recovery Centers Opening in South Texas
Pearland and League City Ranked Among America’s Top Places to Live
Major Fire Engulfs Magnolia Terrace Apartments in West Houston
State Farm’s Rate Hike Sparks Outrage Among California Homeowners
Rising Home Values Threaten Houston’s Low-Income Communities
Texas Senate Approves Major Changes to Insurance Rate Regulations
Houston Prepares for Wet Weather and Thunderstorms
Texas Homeowners Grapple with Skyrocketing Insurance Costs

Additional Resources

• Houston Chronicle: Texas Homeowner Insurance Claims Closed
• Wikipedia: Homeowners’ Insurance
• Fox 26 Houston: New Texas Patient Advocacy Group Fights Unfair Health Insurance Claim Denials
• Google Search: Texas Insurance Claims
• ABC 13: 13 Investigates Houston Area Homeowners’ Risk Ditching Insurance
• Encyclopedia Britannica: Insurance
• NerdWallet: Home Insurance Texas
• Google News: Homeowner Insurance Texas