CONSUMERS WIN WITH INSURANCE COMPETITION

Texas consumers today benefit from a more competitive insurance market, increased availability of insurance and lower rates, thanks to the reforms enacted by the Legislature, as the chart below illustrates. However, while the recent reforms have helped improve our competitive market, it is important for state policymakers to continue the movement towards a more predictable regulatory environment for rates to ensure Texans reap the benefits of a truly competitive marketplace.

As the insurance Sunset process moves forward, legislators should focus on regulation that ensures companies will meet their obligations, protects consumers from bad practices and unfair discrimination, and allows insurers to compete on price and product. In short, instead of chasing the short-sighted goals of artificial price fixing, risk assessment mandates and state determined policy forms, policymakers should stick with the goal of creating a well-regulated competitive marketplace that can handle our state’s tough climate efficiently and still attract companies and capital.

Since the Texas Legislature passed landmark insurance reforms in 2003, the homeowners insurance market has stabilized. According to a 2008 TDI report:

—29 more insurance companies are competing for business in our state;

—Homeowners insurance rates have decreased an average of 13.5%; and

—Insurers are offering many new choices of coverage rather than the old one-size-fits-all   State-promulgated forms.

Texas is on the threshold of a truly healthy homeowners insurance market for the first time in decades, even as insurance companies doing business in Texas continue to absorb some of the most severe weather losses in the country (including more than $10 billion in catastrophic losses in 2008, five times more losses than any other state.) A competitive market serves the interests of consumers, insurers and the overall Texas economy that relies on available, affordable insurance for a healthy business climate.

Learn more:

Insurance Surplus: Why it’s Critical to the Texas Marketplace
File and Use: Why It’s Working – What Still Needs to Be Done
Texas Competitive Marketplace: Consumers Win With Insurance Competition