Homeowners Insurance Claims

Anybody in Weatherford, Mineral Wells, Aledo, Azle, Hudson Parks, Willow Park, Brock, Millsap, Cool, Springtown, or anywhere else in Parker County, who owns a home, will find this interesting.
The Houston Chronicle published a story on October 13, 2011, titled, Home Insurance Rates Rise As Coverage Falls. The author is Purva Patel who has written several article on insurance in Texas.
The article tells us that the insurance companies in Texas are dropping or decreasing certain coverages to allow them to control costs and, in turn, keep a handle on the rates they charge. Consumer groups say its a reflection of lax oversight by the Texas Department of Insurance (TDI) and regulations coming out of Austin.
Since about eight years ago, many insurance companies in Texas have limited coverage for mold damage, limited wind damage coverage to named storms and in some cases eliminated windstorm coverage altogether in coastal areas.
The state’s largest insurer, State Farm, recently said it plans to move new and renewing customers to a minimum 1 percent deductible starting December 2011. This means deductibles will be calculated as a percentage of a home’s insured value rather than a flat dollar amount, increasing how much homeowners would pay out of pocket before collecting on insurance claims.
Reports from TDI reported earlier this year that a survey of insurance companies making up 90 percent of the Texas market found that many dropped or reduced coverage compared to the standard homeowners policies they sold before laws changed in 2003.
Eighty-seven percent of the insurance companies had less coverage for leakage from plumbing, air conditioning or heating; 72 percent had less coverage for sewer backups and 67 percent had less coverage for foundation and slab damage. An example would be that now some insurance companies cover water damage from sudden pipe breaks, but not from slow or repeated leaks. Aren’t most of these damages the result of slow leaks over time?
The consumer group, Texas Watch, says the numbers are pretty clear, “Consumers are not getting the same level of protection they were getting under the standard form. And we are paying more now than we were then. So we are paying more and getting less.”
Texas Watch blames the changes in the law that occurred in 2003 for creating a climate that allows companies to raise prices and lower coverage with less oversight than is needed. These changes were passed by the Legislature when mold claims were creating a financial crisis.
Current rules regarding policies allow the insurance companies to file new policies with TDI and to immediately start using them. It is only later that if the changes in the new policies are disapproved that refunds can be ordered based on the offending part of the policy.
What is important to realize is that this is a political battle wherein the politicians are allowing the insurance companies to operate without meaningful oversight.
Texas Coalition for Affordable Insurance Solutions, an insurance company lobby group, says letting the TDI preview changes before officially filing notice, leads to haggling that can delay the process.
According to figures released by the National Association of Insurance Commissioners, Texas has the most expensive homeowners insurance premiums in the nation. According to the report, the average annual premium in Texas is $1,460 for the most common type of homeowners policy sold across the country.
Insurance company representatives say the report is misleading because it does not reflect the range of policies sold in the state, some of which are cheaper than one used for the comparison.
What they do not dispute is that rates in Texas have grown.
Since the laws changed in 2003, rates have increased 5.1 percent.
Both, State Farm and Farmers have recently filed notices to hike rates.
The insurance industry argues that the increases are justified due to higher costs such as the rising price of building materials.
The bottom line appears to be that you are paying more for less and if you have a claim that is being denied, contact an Insurance Law Attorney.

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