The Texas Department of Insurance has expressed plans to carry out Gov. Greg Abbott’s recent directives “to protect consumers and make property and casualty insurance more affordable for Texans.”
Abbott issued the letter to TDI Commissioner Amanda Crawford in late August with directives to combat steep premium increases that have arisen in recent years.
“Rising homeowner’s insurance premiums continue to squeeze Texas family budgets,” wrote Abbott. “The average annual homeowner’s insurance premium in Texas has increased 79 percent in six years, from under $2,000 in 2020 to over $3,500 in 2026.”
In a response written to Abbott, Crawford acknowledged the directives, and laid out possible administrative actions and legislative changes for consideration.
One of the top directives addressed by Abbott and Crawford was the requirement that insurers account for a home’s FORTIFIED roof status, which is a construction and roofing standard developed by the Insurance Institute for Business & Home Safety designed to make homes more resistant to severe weather, including high winds and hail.
Other directives included excluding the age of the property from insurer consideration, addressing price optimization, creating an Insurance Fraud Task Force, and producing a “concise, web-based study of what drives claim costs … for the commercial auto, personal auto, and homeowner markets,” as well as additional steps.
Crawford noted in a bulletin Wednesday that “premium discounts reward [homeowners investing in loss mitigation measures], result in lower overall catastrophic exposure, and foster a more stable, more competitive insurance marketplace.”
“Texas law requires rates to be based on risk. When a homeowner spends money today to prevent tomorrow’s claim, insurers should recognize that investment with meaningful premium savings,” wrote Crawford.
The letter comes after Abbott signed legislation last session to address insurance-related issues.
Insurers are now required to provide policyholders and insurance applicants with written explanations for cancelling a preexisting policy or declining a policy application.
Additionally, Abbott noted that insurers are now prevented from requiring the bundling of certain policies. Abbott also signed legislation that abolished the so-called “widow penalty,” which was the practice of insurers increasing rates for a policyholder after they had lost a spouse.
