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The Houston Chronicle recently reported about the troubling trend of insurers raising homeowners insurance premiums and reducing coverage. The article is worth your time. We provide background information below to help you understand how we got here and how we can protect Texas families.

What can be done: Texas has a lax file and use system that leaves the Texas Department of Insurance to chase insurers after they raise rates. We noted in the Houston Chronicle piece: “The insurance department doesn’t have all of the tools to keep an eye over what’s happening to ratepayers.” A stronger “prior approval” system would enable regulators to protect homeowners from rate shock before it happens. States like Alabama, Georgia, Louisiana, Mississippi, West Virginia, and North Carolina have this protection in place for their constituents.

At the federal level, the INSURE Act was recently filed, which will create a federal catastrophic reinsurance program to help stabilize the market.

Who benefits right now: The current system is broken and only benefits insurance companies that can jack up rates to concentrate their profits, passing the costs on to consumers. The Consumer Federation of America released a report showing how insurance executives are benefiting, pocketing many millions of dollars in salaries and bonuses. They found the CEOs at the 10 largest auto and home insurance companies have been paid a quarter billion dollars in just the last two years. It is shameful for insurers to exploit captive consumers who are forced to buy their products.

How Texas families are hurt: In 2017, the insurance lobby pushed through legislation that makes it much harder for Texas families and businesses to hold insurers accountable in court when they wrongfully deny or delay weather-related property claims. The Center for Justice and Democracy has produced the definitive analysis showing why limiting lawsuits will not lower insurance premiums because rates are driven by different factors. The so-called tort “reform” often pushed by insurance companies just results in a windfall for them, lining their pockets and only compounding the problem for policyholders with deserving claims in need of prompt and full payment.

Lawmakers must take action to help protect policyholders. Please consider us a resource on this important pocketbook issue. We have advocated for the rights of policyholders for over 25 years and will continue to do so as insurers soak hardworking families.

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