Houston homeowners face rising insurance costs as natural disasters become more frequent.
HOUSTON — Jonathan Leopold is one of Houston’s newest homeowners.
“The American dream. You know, work hard, save up some money and find a house to set some roots,” Leopold said.
But the part of the American dream they didn’t tell us is that finding home insurance in Texas can be hard.
“You have to have home insurance that qualifies with the mortgage company. It was a little frustrating that I had to go shop multiple insurance agencies,” Leopold told KHOU 11 News.
It’s also more expensive than ever before.
“I’m going to say about, 10 to 15% higher. Definitely. Yes. And in some areas even more,” Melody Fontenot, the owner of Jamel Insurance Agency, explained.
Melody Fontenot is an insurance broker who helps homeowners like Johnathan find the coverage they need. She said Jonathan isn’t the only Texan who has had a frustrating time finding a policy that fits their needs at a price they can afford.
“A lot of people are just being priced out,” Fontenot said.
As you may have guessed, a major reason insurance companies are raising rates is the growing number of natural disasters, and if you’re in an area that’s been hit more than once, good luck.
“Primarily, on the flood-prone areas, if they have flooded in the past, you know, or more, a number of times, then they’re pulling out of that area,” Fontenot said.
This means that companies that remain can raise rates even higher. Fontenot added that both Houston’s high number of rental properties and vacant homes are also leading to increases in cost for homeowners’ insurance. She said another contributing factor that many aren’t aware of, smaller insurance companies are being forced out.
“Some of them may even actually go out of business and, or have to merge with, insurers that have better financial stability,” Fontenot explained.
Meaning with less competition, the larger companies left standing get to set their price.
John Black is a lawyer who represents homeowners against insurance companies and is one of the founding partners of the Daly & Black firm.
“Insurance companies are charging more and giving less, covering less, and that creates a real tension,” Black said.
This is a tension that has homeowners struggling to find insurance and get a good price.
“It is a process you have to go through to get that homeowners’ insurance. I just continued to shop and did not get discouraged,” Leopold said.
So, what can you do to get home insurance or lower your current insurance costs? Melody Fontenot shared some ways to help you keep your premium down:
First, she recommends shopping around for new rates each year. Next, work to improve your credit, because the better it is, the less you pay. Lastly, she recommends using a broker, as they work with multiple companies to find you the best rate.