View this article online: https://www.insurancejournal.com/news/national/2003/03/14/27051.htm
In a highly anticipated preliminary report to the Texas Legislature, Insurance Commissioner Jose Montemayor told lawmakers that some of the state’s 12 largest homeowners insurance companies are charging rates that are too high by as much as 25 percent in some cases.
Montemayor presented his initial findings from data submitted by insurance companies to the Senate Business and Finance Committee. Homeowners insurers were required to file information on their rates with the Texas Department of Insurance under the provisions of the recently passed Senate Bill 310. The report was based on a study of the information provided by the top 12 non-rate regulated residential property insurers in the state, which command about 83 percent of the market. Rates from Jan. 1, 2000 to the present were reviewed.
The report said where rates are excessive, two factors were primarily the cause: Companies charging for one type of coverage while providing a policy with less coverage; and Companies inappropriately forecasting their loss trends based on policies they no longer sell.
Rates since 2000 have increased an average of 38 percent statewide. The report speculates that the increase would have averaged 56 percent without out the departments recent actions on coverage forms. Rate changes for individual companies ranged from 22 percent to 67 percent.
The report showed that discounts, credit scoring and location of the residence influenced the rates individual policyholders were actually charged.
Legislators are expected to use the findings in the report as they finalize legislation on how the state’s homeowners insurance market is regulated.
Montemayor’s final report is expected to be published on March 28.