Texas Homeowners May See Slightly Lower Rates

Some Texas homeowners could see lower insurance rates this year, the Associated Press and Houston Chronicle reported.

Record low loss ratios reported by Texas homeowners insurers in 2004 prompted the Texas Department of Insurance in March 2005 to order some homeowners insurance groups to file and justify their rates. The filings were due May 1.

In their rate filings for 2005, several smaller insurance companies have indicated rate decreases of up to 14.5 percent, according to TDI.

In the March call for rate filings TDI indicated in 2004 the industry overall had an average loss ratio of 27.6 percent. The department noted, however, that a single year’s experience does not necessarily constitute a basis for rate making but it is an indication of a market that should be in recovery.

Lower claims costs and stiffer competition among insurers are among the factors contributing to the current round of reductions. TDI noted that Texas experienced few catastrophic storms in the coastal areas and in the traditional hailstorm areas of North and Northeast Texas last year. The state was spared the devastation caused by hurricanes that Florida experienced in 2004.

“The more competition, the more products and the better it is for consumers,” Sandra Ray, a spokeswoman for the industry trade group Southwest Insurance Information Center, told the Associated Press.

The insurance department has not yet reviewed the changes to determine if they are appropriate, according to a TDI spokes-man. The companies filing rate reductions include: Travelers Lloyds of Texas Insurance Company; Texas Select Lloyds Insurance Company; Chubb Lloyds Insurance Company of Texas; Texas Farm Bureau Underwriters; ASI Lloyds; Interinsurance Exchange of the Automobile Club; and America First Lloyds Insurance Company.

Copyright 2005 Associated Press. All rights reserved.