Texas homeowners may face even higher bills amid mold concerns

Concerns over mold may soon cause an increase in insurance premiums already substantially higher than the standard rates set by state regulators, according to new premium comparisons by the Texas Department of Insurance.

A review by the department shows that the vast majority of insurers have priced their policies higher than the standard rates, which are supposed to allow companies to earn a reasonable profit.
Consumer groups say Texans are being charged too much for homeowners’ insurance, a charge evidenced earlier by a national study that showed Texans pay the highest premiums in the country.

“When you have the highest rates in the country, the rates ought to be coming down, not going up,” said D.J. Powers of the Center for Economic Justice, which represents low-income and small-business consumers.

Rick Gentry of the Insurance Council of Texas told The Dallas Morning News insurers have been hit by increased property losses.

The situation will worsen if nothing is done soon to address the growing problem of mold damage in homes, he said.

The statistics released this week also found that Nueces County homeowners are more likely to file mold damage claims than other parts of the state.
A survey found that the average cost of insuring a homeowner in Nueces County was far greater to the company than in any other region, according to the Corpus Christi Caller-Times. Still, other parts of the state had costlier average claims.

“It clearly demonstrates that the insurance industry and our customers are in a crisis situation,” said Jerry Johns, the president of the insurance trade group, Southwestern Insurance Information Service.

The insurance industry is calling for a rewrite of the standard homeowner’s policy to exclude all kinds of mold coverage. Homeowners, meanwhile, are complaining of homes that make them sick and insurance companies that delay settlement of claims while mold grows in their homes.

In the past few months, State Farm, Farmers, and Progressive insurance companies all announced they would stop selling new water-damage policies in Texas, which meant they won’t offer the standard homeowner’s policy to new customers.

Farmers notes that although it has withdrawn comprehensive (HOB) coverage for new customers, it still offers limited policies without coverage for water damage from leaky or broken pipes (HOA). The moratorium on new comprehensive coverage does not affect current customers.