HOMEOWNERS' INSURANCE

Texans pay among the highest homeowners' insurance rates in the nation.  This is not justified because the risk in Texas is similar to other states.  Texas ranks third behind California and Minnesota in weather related losses, but the average homeowners' premium in Texas is almost $600.00 more than those two states.  In 2007, insurance companies in Texas have had a fifth straight year of extraordinary profits.  The companies paid out 36.5 percent of their premiums in losses.  The companies have set 58% as the figure to have a good profit.  The companies readily admit that 30% of the premium is used for expenses such as agent commissions, overhead, and administration costs.  This means that 33.5% of the average premium is profit for the company and 12.5% is considered by the insurance companies to be an acceptable profit.  The average premium in California is $753.00 and the average profit is $94.13.  The average premium in Texas is $1,328.00 so the average profit is $444.88.  EXORIBANT!!!! 

Another fact to consider is that the coverage has decreased in recent years. So Texans are getting less but paying more.

Insurance premiums are being based on credit ratings.  This is a crime, especially in light of today’s economy.  With the nation headed into a severe recession the number of people with credit problems will increase.  Credit problems mean lower credit ratings and higher premiums.  If a person pays the premium for insurance, they deserve the coverage.  If the person does not pay, they do NOT get any coverage.  Neither a tornado, hurricane, repair man, nor lumber yard clerk check a person’s credit score before proceeding with their activities.  This is a scheme for insurance companies to make more profits on the backs of those in our society who can least afford it.