Commissioner Says Texas’ Homeowners Problem Won’t Happen in Okla.

In response to Farmers’ notification that it won’t be renewing homeowners polices for its Texas customers, Insurance Commissioner Carroll Fisher issued an announcement clarifying that Oklahomans are protected from problems faced by homeowners in Texas.

Fisher said officials with Farmers Insurance Group met with Oklahoma Insurance Department staff to assure them the company has no intentions of making a similar move in the state.

Because of difficult decisions made by regulators, Farmers Insurance Group is in a much better financial position in Oklahoma than it was in Texas. Additionally, Fisher has worked to attract insurance companies to do business in Oklahoma. This may be part of the reason Texans pay substantially higher rates than Oklahomans, Fisher said.

“We granted Farmers rate increases when justified in order to make sure Oklahomans had an insurance market to cover their homes,” Fisher said. “We worked not only with Farmers but with all insurance companies, trying to be fair both to the consumers and the stockholders. Sometimes, it can be a difficult balancing act but this demonstrates what can happen if you don’t keep both parties in mind.”

Fisher noted that Texas has a number of problems in the homeowners insurance market not faced by Oklahomans.

“First, our rate making systems are substantially different,” he said. “Additionally, we have three times as many companies willing to sell homeowners insurance in Oklahoma as they do in Texas, even though it is a much larger state. I believe competition is the best way to keep rates in check.

“Finally, Texas has become a hot bed for mold-related problems,” he said. “We have had some mold claims, but early-on the department worked with the industry to find solutions to a situation we saw on the horizon. The mold crisis began in Texas and seems to have remained there.”

Fisher pointed out that nationwide, homeowners have faced significant increases in rates. Even in Oklahoma, some companies are currently not writing new policies, but none have decided not to renew all existing business.

Nonetheless, many Oklahomans may be concerned that they are paying for Texas losses. Fisher assured homeowners that this is not the case.

“Rate increases are filed in each state solely on each state’s statistics,” Fisher said. “If Farmers Insurance Group losses money in Texas, they must make that up by going to the capital markets or seeking an infusion from their parent company. Oklahomans do not subsidize Texas insurance rates.”

Topics Texas Agribusiness Homeowners Oklahoma