Homeowners insurance is essential when buying a new home and to protect your most valuable asset. It only takes a few minutes to compare rates and get the best home insurance. (iStock)
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The Texas Department of Insurance (TDI) is urging home insurance companies to offer “meaningful” premium discounts to homeowners who invest in measures that reduce the risk of storm and wildfire damage.
Texas Insurance to assist storm-resistant home upgrades
Homeowners insurance is a vital part of safeguarding you and your home again any financial loss. But there are three add-ons to your basic insurance that ensure extra protection and allow you to get the most out of your homeowner’s insurance policy.
What we know:
TDI issued the guidance on Sept. 16 in response to a directive from Gov. Greg Abbott late last month, who asked the agency to take steps to make property and casualty insurance more affordable for Texans.
The commissioner’s bulletin encourages insurers to develop “actuarially supported” discounts for homeowners who use proven loss-mitigation measures, including:
- Roofs that meet the Insurance Institute for Business and Home Safety’s FORTIFIED Home standard
- Impact-resistant roofing materials
- Construction or retrofits designed to protect against wind, hail and wildfire
Which home upgrades qualify for insurance discounts?
Dig deeper:
The bulletin does not establish a specific discount amount or require that every insurer offers a discount. Instead, it encourages companies to account for loss-mitigation investments in their rating plans and premium calculations.
Insurance companies that want to create or expand loss-mitigation discounts must submit their filings through the System for Electronic Rates & Forms Filing, or SERFF.
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State officials push for savings
What they’re saying:
“When homeowners make their homes stronger, they’re protecting their property and helping reduce costs for themselves and their communities,” Crawford said in a TDI news release.
TDI said insurers should also clearly inform policyholders about available credits and avoid requiring homeowners to submit redundant surveys or inspection forms when they already have certificates, or official designations, showing that their property meets a resilience standard.
“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,” TDI wrote in the bulletin.
Rising Texas home insurance rates
The backstory:
Abbott’s Aug. 24 directive to TDI followed a sharp increase in homeowners insurance costs. The governor said the average annual homeowners’ insurance premium in Texas had risen 79% in six years, from less than $2,000 in 2020 to more than $3,500 in 2026.
TDI said the Sept. 16 bulletin is one of several actions taken in response to Abbott’s insurance affordability directives. The agency is also examining additional administrative and legislative changes related to property and casualty insurance.
Legislative changes
What’s next:
The agency also recommended changes to state law that would require insurers to consider steps homeowners have taken to protect their properties from wind, hail and wildfire damage when setting rates.
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The next legislative session begins in January.