Any talk of insurers not writing homeowners polices in Houston? (Galveston: fit in, insurance)

[Robert123]

I've been reading about how some insurers (like Allstate) have decided not to renew, or they've cancelled, some homeowner policies all up and down the east coast due to fears of hurricanes and flooding in places it's not frequently happened before--IN THE ABSENCE OF A TRAGEDY (that is, pre-emptively). They've also done it in Katrina and Rita areas. It would seem that they would take the same pre-emptive measures in a place like Houston, since it has a track record of costly flooding, and even MORE risk than these other places, due to the real possibility that a level 3 or higher could shoot up the shipping channel.

I've read articles of Floridians' policies going from $500/yr. to over $5000/yr. in just the last five years. It seems that just one hurricane or threat would set in motion the same for a place like Houston, but nobody seems to talk about this. Is it an ostrich head in the sand thing?

Has anyone seen articles about this, or heard any rumors? I'd like to read up on this. Thanks!
R

[ChangeIsGood]

Yes, very true. This just occurred during our recent search for homeowner's insurance. Allstate denied us coverage. They said we were in an area where they were no longer starting policies, because of too many losses in the past (I guess hurricane aftermath). The rep told me they were only serving those customers they already had, but were not accepting new ones. Allstate was the only one that denies us, out of the three companies we called.

[Wahine]

Unfortunately, the Galveston County paper just ran an article about why windstorm policies had been cancelled for thousands of people in the county.

The Galveston County Daily News (http://news.galvestondailynews.com/story.lasso?ewcd=1714e5fad3eb6922 - broken link)

If you're looking to buy, you might want to wait until the new flood plan info comes out for areas like Harris County.

[maddysammy]

I am in Florida moving to Katy.. and we may the only few in Florida that still have state farm! We got a call from our agent said the rate has gone up to 4800 a year OMG. We are still in the process of selling our home..We have a 3100 sq ft home on a postage stamp lot... so we will continue with them.. but we called a state farm rep in Katy and he gave us a rate for the higest best policy and it was only 1600 Now thats a bargain LOL!!

[Robert123]

Thanks for the feedback. It's interesting, though, that none in Houston per se seem to be wondering about this. Insurance is definitely a for-profit industry that is in the business of accepting reasonable risk. The fact that they are progressively cutting loose what seem to be even less risk-prone areas than Houston would make me wonder... These overall U.S. trends have all happened very recently, so I wouldn't be surprised if things were to change for the Houston metro in the near future. Before you think, oh, how could they do that in such a huge market and get away with it---think the entire state of Florida!! Even if you have insurance, the deductible is half the price of your home, and nobody could come up with that. And we've all seen that the government is not exactly there to bail us out. But maybe denial is the way of the day, along with consumer spending and negative savings...

Anyway, such an insurance scenario would make Houston NOT the best escape for all of the Californians and Floridians fleeing high cost of living issues. Ok, setting down my crystal ball now..... I was just wondering where I could read up about this. I hope I'm wrong, but it just seems that this is something I would be cooking up if I were a greedy corporate insurance exec. They have shown (given their east coast policy changes) that they formulate policy not only on what weather events have already occurred, but on what they can suggest MIGHT occur. Houston will be a perfect storm of cha-ching!!

And in time, Houstonians would have a hard time selling their properties (i.e., their life savings) because nobody could buy them given their lack of insurability, or extremely high cost of insurability (as is already happening on the east coast).