Beryl Will Skyrocket Property Insurance Prices In Texas, Experts Warn

Property insurance in Texas is about to rise, especially in places like Houston, thanks to increasing catastrophic events like Hurricane Bery.

According to the Texas Tribune, many insurance researchers said they expect insurers will continue to rise and become more selective with what type of damage they cover as catastrophic events become more common in the state.

Climate change is making disasters more common. This storm season, the National Oceanic and Atmospheric Administration is forecasting an above-normal season with as many as 25 named storms, 5 more than the previous year.

“That means more frequent and severe hurricanes and other wind storms in Texas that will kill people, injure them, damage property and cause higher insurance payouts,” Dave Jones, director of the Climate Risk Initiative at UC Berkeley told the Tribune. “The insurers respond by raising prices and not renewing insurance for those most exposed or excluding coverage for wind.”

Property insurers use rate increases to offset the cost of catastrophic events. According to the San Antonio Express-News, in Texas, rates jumped an average of 21.1% last year, the largest increase in a decade and nearly twice the U.S. average.

According to a NerdWallet survey, Houstonians already pay more than twice the national average to insure their homes against climate disasters. The city was also the most expensive for home insurance, surpassing Miami and other big metro areas, and the price is just expected to go up.

In addition to increasing costs, experts also foresee that more Texans will have to buy separate insurance to cover for wind and other damages.

Experts have also warned that Texas may be following the path of other states like California and Florida, where insurances had to scale back or stop their operations.

“Florida is much further along in this continuum, but that may be where the rest of us are going,” Jones said. “I don’t think we’re going to rate our way out of this problem. We need to deal with the fundamental driver of risk, which is climate change.”

As storms become more catastrophic and property insurance rates continue to rise, homeowners will struggle to keep up with the prices.

“It’s a hard and bitter pill for Texas homeowners to swallow,” Ware Wendell, executive director of insurance advocacy organization Texas Watch, said. “If you have a mortgage, of course the bank wants to make sure the property is insured. But as these rates go up, it’s harder and harder for families to find the money to pay those bills.”