Gubernatorial candidate Bill White has the right idea about Perry and Texas insurance.
The Houston Chronicle reported that:
White to seek bill to regulate insurance hikes
Homeowners hurting, he says; Perry cites effort
By JAMES PINKERTON
Aug. 26, 2010, 11:38PM
Democratic gubernatorial candidate Bill White, flanked by local homeowners, said Thursday he will push legislation requiring insurance companies to get state approval before hiking home insurance rates.
White said Texans pay "hundreds of dollars more" to insure their homes than residents in other states. "Since Rick Perry's been governor, our home insurance rates have gone up almost 50 percent in Texas," White said.
State law requires insurance companies to submit rate changes to the Texas Insurance Commission for review, but they can enact them immediately. If the agency believes a rate increase is excessive, it can launch a legal challenge that can take years to resolve while consumers continue to pay, White noted.
The law was signed by Perry in 2003.
"Here's my plan … profitable home insurance companies will need to get prior approval to show the reasonableness of any rate increase before the rate increase goes into effect," said White. "This type of plan has worked in other states where insurance premiums are lower. It's time we had a governor who stuck up for ordinary Texans."
Mark Minor, a spokesman for Perry's re-election campaign, said the governor was able to win $500 million in insurance savings since 2003, when major insurance companies were required to lower their rates. More recently, Texas has been struck by devastating hurricanes that have affected insurance rates, he said.
"It's not surprising that a liberal trial lawyer like Bill White would address the issue by calling for increased regulation," Minor said.
The former Houston mayor cited the most recent figures compiled by the National Association of Insurance Commissioners, showing that only Florida has higher home insurance rates than Texas. The 2007 figures indicate the most common homeowners policy in Texas costs $1,448, 76 percent higher than the U.S. average premium of $822.
Beaman Floyd, executive director of the Texas Coalition for Affordable Insurance Solutions, an industry trade group in Austin, said insurance companies providing coverage in Texas have been battered by hurricanes, ice storms and wind storms.
The current rate review allows companies to quickly adjust rates to stay competitive.
"The assertion is being made that rates are too high, but if you look at loss data and you force rates lower than they should be, you're destabilizing the market place and threatening the availably of insurance," Floyd said.
Aides to lobbyists
Bettye Davis, a retiree who lives with her husband in northeast Houston, said their homeowners insurance premium jumped 27 percent from 2009 to 2010, "and we really don't know why.
"We did call, and they told us we should either raise our deductible, or buy our car insurance with them," she said.
White met with Davis and other homeowners Thursday and said the dramatic premium hikes amount to a tax that threatens the viability of home ownership.
"It's wrong, it's just flat wrong, when we have rates that are so much higher than the national average without some kind of approval by regulators," White said.
He also cited 10 former Perry staff members who together have earned up to $6.2 million lobbying for insurance companies.
Norm Wigington, a retired Texas Department of Transportation employee, said his homeowner insurance rose 37 percent since 2006.
"We really are being pushed into a corner," Wigington said. "I'm looking forward to ... insurance reform where we can have prior approval, where we can have some expectation of reasonable growth in these costs."