Sunday, February 15, 2009

Your Deregulation Charges

It's been mentioned here before that Texas has ridiculously high homeowners' insurance rates, and one big raise recently came during the meltdown of high tech. Everyone else invested in the industry lost money. Consumers of homeowner insurance in Texas got the charge and the story was of big losses from storms.

Reporters just gave us a very good job of research into charges and the industry in the Dallas Morning News. It is every bit as big a hoax as we had long thought, and continues to make the excuses.

Six years since a crisis in homeowners insurance compelled legislators to make sweeping reforms, many Texans have less coverage but still pay some of the highest premiums in the country.

More than a million Texas homeowners have bare-bones policies that don't completely cover damage. Coverage that once was routine no longer exists in many policies. Policies that cover fewer risks or pay less have supplanted many that offered full coverage.

And state oversight occurs in a political environment in which industry lobbyists and campaign contributions are prevalent.

While coverage diminished, Texas routinely ranked among the leaders in average premiums. Statistics from the National Association of Insurance Commissioners show the average annual Texas premium – the nation's highest – is $1,372. That's 80 percent more than the national average.

Other catastrophe-prone states fill out the top rankings: Louisiana takes second place at $1,144 a year, with Florida a distant third.
To explain Texas' high premiums, the insurance industry and state officials cite the state's severe weather. But a News analysis of national weather data and insurance premiums found that Texas' premiums were higher than expected given weather damage over the years. In fact, they were 50 percent higher than what they statistically should have been if weather were the determining factor. (See "How we did it" box.)

Texas has more tornadoes and hailstorms than any other state, federal weather data show, but when the state's land area is taken into account, its ranking drops. Texas ranked fifth in total damage from 1990 to 2007.

"The reality is that other portions of this country have incidents of weather also," said state Sen. Royce West, D-Dallas. "But their rates are not the same as Texas."

While I've already done one post declaiming the mogul hordes who have deregulated to great profit at the expense of working folks, this is one of the dirtiest games there is. Ultimately, it's sucked the life out of our entire economy.

Thievery has lots of friends, and it's become rampant. Now let's see how the thieving goes without any consumers to victimize.

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Anonymous larry, dfh said...

Ruthe, apparently the Insurance Commissioner in TX is an appointee. I found this article which represents insurance in TX as pure politics. In my state of DE, the insurance commissioner is elected, although their office is in a building surrounded by insurance companies. Additionally, the fire marshal more or less works for UL, which is the standards-setting part of the insurance industry. Hey, they own EVERYTHANG.

2:04 PM  
Blogger Ruth said...

Larrydfh thanks, and ayup, it is dirty as judgeships in TX. Our gov't since it went rethuglican in 1963 after Civil Rights, has totally been the mafia for business. And I didn't use it, but there was even an editorial yesterday in DMN against the legislative revolving door. It's almost as thuggish as the DuPonts! Yikes.

1:26 AM  

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