Stormy 2015 could bring pricey 2016 for insurance

While this is a big year nationally for tornadoes -- it has also been a busy year for natural disasters. In the state of Texas, as a result: those events could trigger some insurance companies to increase policy rates.

Insurance crisis response teams started setting up - Monday- in areas around Garland - which were hit by tornados this past Saturday. Mark Hanna - with the Insurance Council of Texas - is also heading to North Texas to help calculate damage estimates.

"You look back, it has been a rough year,” said Hanna.

The destructive trend in Texas began in April with hail storms hit and tornadoes. The number of incidents - only intensified in May -- striking practically all of Texas with the exception of the Big Bend and El Paso regions.

"And then we had the wildfires, we had the drastic drought that just occurred over the summer and then here came flooding  again, and then for the end of the year you think it’s about over and here come tornadoes, it’s been a rough year,” said Hanna.

The storms that hit the Metro-Plex will add to the hit that insurance companies will take. The payout for 2015 is expected to exceed previous years.

Home losses spiked in 2011 at $4.1 billion but have remained steady around $3 billion since then.  A single event - like what happened in Dallas- typically does not trigger a major rate increase. But according to Hanna - all of the natural disasters in 2015 - added together- could prompt some insurance carriers to classify specific areas as a higher risk.

"20 years ago we looked at the state kind of as a whole, certain districts of the state, but now it’s gotten so finite with computers and everything, they are zeroing in on neighborhoods, zip codes and individual homes so they look at the entire history of what’s happened and try to get an aspect of what’s going to happen down the road,” said Hanna.

There is no direct impact of a single loss event on insurance rates, according to officials with the Texas Department of Insurance.

“Catastrophe losses are built into an insurer’s rate, and homeowner’s insurance rates include a long-term average of historical catastrophe losses over time,” said Jerry Hagins in a statement sent to FOX 7.

If rates do go up -- it’s recommended that you shop around -- because there are currently about 120 companies certified to write insurance policies in Texas. Homeowner’s are also urged to take time to document everything of value in the house. Smart phones make it easy -- and the images can been stored off site -- safely in a cloud.

The Following is the statement sent to FOX 7 by TDI:

The Texas Department of Insurance (TDI) stands ready to help consumers with any questions or problems related to their insurance coverage. TDI can be reached toll free at 800-252-3439.
TDI is sending a consumer specialist to the DFW area to monitor the current situation and offer assistance to local agencies. Additional insurance personnel will be sent to staff resource centers if needed.
Consumers whose homes were damaged in the recent storms are encouraged to contact their insurance agent promptly to begin the claims process. In addition, they should:
• make a list of damaged property
• take steps to minimize further damage
Severe weather can strike anywhere in Texas. To be prepared, insurance consumers should:
• make a home inventory
• gather important insurance documents, including agent contact information
• know what the policy covers and what the deductible is
 

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