AUSTIN (Nexstar) –  During a Texas Senate Business and Commerce hearing Wednesday, lawmakers heard invited testimony examining soaring property and casualty insurance costs. Testimony focused on the need for more affordable options and the need to address the role of AI.

Increased costs

Amanda Crawford, the Commissioner of Insurance at the Texas Department of Insurance (TDI), acknowledged the reality of rising insurance costs for everyday Texans.

“The past few years have been very, very difficult. The average annual homeowner premium in Texas has increased from under $2,000 in 2020 to over $3,500 today. It’s a 79% increase in six years. That is a tremendous burden for Texans, especially for a necessary product like home insurance,” Crawford told lawmakers Wednesday.

Crawford went on to clarify that this increase can be attributed to increases in home values and claim costs related to severe weather.

“Annual homeowners’ losses averaged 5.5 billion from 2015 to 2020, rising to 9.1 billion from 2021 to 2025.” Crawford went on to say that “Last year alone, the National Weather Service recorded 902 hailstorms in Texas. The next closest state, Kansas, had 375.”

Holding insurance companies accountable

Crawford clarified that the TDI requires insurance companies to elaborate on their filings to ensure that Texans are not subject to unfair practices and prices.

“My expectations are that every rate filing submitted to TDI gets a careful review. We examine every statutory filing for statutory compliance. We verify the math, we scrutinize assumptions, we make them show their work”

According to the Texas Insurance Code, the rate review process conducted by the TDI does not explicitly focus on affordability.

“There is not a purpose in there around affordability. It is about driving market competition. It’s about making sure they’re not excessive, but then they’re also adequate. And it’s about having market forces drive the rates that are filed. So I think that’s an interesting perspective when you look at it, because that really frames the whole rate review process as it has been put into law.”

Insurance company officials say they are also focused on affordable costs.

“Our industry is not just saying, hey, legislators go fix all this. We are working all the time to bring down costs. It’s a good business decision because it helps us be more competitive,” said Scot Kibbe, the Vice President for State Government Relations at the American Property College for Insurance Association.

Concerns of price surveillance

Senator Nathan Johnson, D-Dallas, questioned whether insurance companies may be using technological advances, such as AI, to participate in price surveillance, a tactic to maximize profits.

“It sounds like, to some extent, every industry, with the advent of technological advantages we didn’t use to have, is able to create a special price just for you to find out your breaking point,” Johnson said.

David Bolduc with the Office of Public Insurance Counsel noted that there are protections in statute against companies charging different prices for the same coverage. But he added that the practice can be difficult to detect.

“I don’t know that TDI has the ability to monitor that. I mean, we hear about it,” Bolduc said in response to Johnson. “I think, if you could do something in statute that would allow us to report it, or would allow TDI to take action about it, that might be useful in terms of monitoring it,” Bolduc added.

Earlier this month, the TDI released a “use of artificial intelligence” bulletin to set expectations on how “regulated entities will govern the development, acquisition, and the use of AI technologies in their operations.”

Crawford says this bulletin will help address price surveillance concerns by reminding companies of Texas Insurance codes related to unfair discrimination and deceptive practices.

“That’s one of the reasons for putting out the AI bulletin, the expectations and the consumer protection around the use of that data, and what they are using that for,” Crawford said.

Potential solutions

Bolduc called on lawmakers to reexamine AI’s role in the industry. He also asked lawmakers to look into making coverage changes more transparent.

“It might be useful to continue looking for ways to be transparent about coverage changes. Notices of material change don’t seem to be working particularly well in the sense that we get a lot of phone calls from people saying they don’t understand what happened to them,” Bolduc said Wednesday.

Billy Crocker, Senior Vice President of Alliant Insurance Services, says the best way to fix pricing is to drive up competition between insurance companies.

“I think creating a lot of competition is the best way to drive this down, both for personal and business lines,” Crocker told lawmakers. “And then that brings the opportunity for access.”

MOBILE, Ala. (NBC 15) — Two new Alabama laws are aimed at tackling blight in the city of Mobile. One speeds up the city’s ability to deal with abandoned properties that have become neighborhood eyesores. The other gives neighboring homeowners the first chance to buy abandoned properties before they ever reach a public auction.

For Earl Moore, the overgrown lot on Boykin Blvd. is more than an eyesore. He says he can’t get home insurance because the large tree limbs from the vacant lot hang over his house.

“I’ve been trying to get that straight for the longest,” said Moore.

A new law sponsored by Rep. Barbara Drummond could help. If the property – and others like it – go through the city’s municipal code lien foreclosure process, Moore and other neighboring property owners will get the first opportunity to buy it.

“If it’s affordable, I’d be glad to jump on it,” said Moore.

“This law will simply say that before you put it out to the public, you have to notify Mr. Moore or even the next property owner,” said Drummond. “This way the people in the neighborhood, who are living this every day, will have knowledge that what you have right next door to you is for sale, and if you choose to buy it, and you can, you can extend his property rights. I think it’s going to help us in the long run.”

Drummond says complaints about blight come up at every community meeting she attends. She says the goal is to give residents a chance to invest in and improve their own neighborhoods.

“We have too much blight, and this way we’re going to give citizens an opportunity to help us rid the city of that blight by making them become owners,” said Drummond.

Drummond also sponsored a bill that was signed into law that speeds up the city’s municipal code lien foreclosure process. Both laws only apply to Mobile.

“These specific properties are going to be ones that were identified via code enforcement 99.9% of the time, ones that need to be demolished. So, that’s where that code lien comes from,” said Baxter Bishop, Mobile’s Housing Improvement Program Director.

Under the new law, foreclosure sales will be able to occur 30 days after a court order instead of 45 days, and the deed must be executed within 30 days of the sale instead of 90 days.

“So, instead of having to wait an extra month or two, you know some of these timelines were 90 days and we cut them down to 30, that’s allowing the city to move faster and hoping that we can get that property turned back over into productive use,” said Bishop.

Both laws go into effect on October 1st this year.