Texas home insurance problem worsens as insurer halts new policies

Another company offering homeowner insurance in Texas will stop offering new policies in the state, per reports, in a move that’s likely to exacerbate the sector’s unfolding crisis.

Progressive Insurance confirmed to WFAA-TV earlier this week that it was “temporarily restricting new homeowners (HO3) business for certain agents in several states,” including Texas. Last month, home insurance comparison website Insurify reported that Progressive would stop offering new home insurance policies in Texas and some Midwestern states, including Illinois, Minnesota, Missouri, Nebraska, and Wisconsin.

No other state besides Texas has been confirmed as being included in the “temporary” restrictions by Progressive. Newsweek contacted Progressive Insurance for comment by email on Friday morning, outside of standard working hours.

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According to Insurify, which quoted a report from P&C Specialist, Progressive stopped offering new home insurance policies in Texas as of August 13. While Progressive didn’t cite concerns over more frequent natural disasters as the reason for cutting coverage in the state, the issue is mentioned in a letter to shareholders in the company’s quarterly 10-Q filing obtained by Insurify.

“Reducing the impact from weather-related volatility is strategically important and shifting our geographic mix continues to be a top priority,” Progressive’s CEO Tricia Griffith said in the letter. “We continue to focus on growing in states where weather risk is relatively lower, while maintaining or reducing our market share in higher volatile states that are more susceptible to catastrophic weather events and have higher exposure to hail.”

At the end of 2023, Progressive dropped 115,000 policyholders in Florida, a state prone to hurricanes and disastrous tropical storms, sending them non-renewal notices. Several private insurers have cut coverage or withdrawn entirely from the Sunshine State in the past few years as Florida faces a homeowner insurance crisis exacerbated by widespread fraud and excessive litigation.

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According to the Texas Department of Insurance, the Progressive Group is among the ten largest home insurance companies in the state. In 2023, the agency reported that Progressive wrote $390,170,992 in premiums for homeowners’ multiple-peril insurance that year.

The reported pullback from the company is likely to exacerbate the situation in Texas, where another insurer—Foremost Insurance, a subsidiary of Farmers Insurance—stopped renewing some policies earlier this year. The company cited “our exposure and risks relating to natural and catastrophic losses” as the reason it was not renewing a Houston homeowner’s policy, as reported by the Houston Chronicle.

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Like other states vulnerable to extreme weather events, Texas has seen home insurance premiums climb across the state in the past year. According to Bankrate, Texas homeowners pay an average of $3,898 for $300,000 in dwelling coverage—72 percent more than the national annual average cost of home insurance, $2,270 for $300,000 in dwelling coverage.

In July, NBC 5 reported that some homeowners in the state were hit with double-digit insurance rate hikes, with one resident’s premiums rising from $2,600 last year to $8,800 this year.

Are you a Texas homeowner whose home insurance policy isn’t going to be renewed by Progressive? Have you faced significant rate hikes? Contact g.carbonaro@newsweek.com.