Richard Johnson - Insurance Council of Texas

Episode Transcript

Speaker 1 (00:00):
All right, insurance, we all have to have it. We
all have it. If you have a home, you have
a homeowner's policy. I'd like to think you do anyway.
Certainly if you old money to the bank, you have
to have a homeowners policy. And if you are also
buying things like flood insurance and extra wind inhal insurance.
It'd gotten pretty dog one pricey. But it could get
even more pricey as some insurance companies have decided they
no longer want to write new policies here in Texas,

(00:22):
the latest one being one of the biggest ones, and
that's Progressive Insurance. Richard Johnson joins US the Insurance Council
of Texas. I guess Richard first question would be, are
you surprised that Progressive is not going to write any
more homeowners' policies? And how much do you think this
will impact the cost of insurance from other companies?

Speaker 2 (00:41):
Sorry about I think it was cut off. I just
kind of came through halfway through your question. Sorry about that,
but I did want to correct something. So you know,
Progressive is by no means leaving the state. They're still
the number one auto insurance writer, and they're actually not.

Speaker 1 (00:58):
So they're not writing new papalicies.

Speaker 2 (01:01):
I said, well, that's actually not even true, right, and
that report actually wasn't true. So they're they're just putting
some restrictions on certain areas and certain agents. And so
it is a little a little concerning how this is
kind of uh spun out, But they are definitely putting
restrictions of as some other companies have, and quite frankly,

(01:23):
companies have been doing it for the past couple of decades.
That's why we have, you know, programs like TWEA, uh
you know, heck, on a national national stage, we have
the National Flood Insurance program that we have the STARE program.
Companies right now are paying out more in claims than
what they're getting in premiums. And Texas is being hit

(01:44):
hard by every kind of weather catastrophe that you can.
So companies are are definitely re examining and looking at
that throughout Texas and and across the country. Really, this
isn't a Texas issue. This is a a weather, a lawawsuit,
and an economic issue.

Speaker 3 (02:01):
Yeah, but you know, you pay home insurance maybe for years.
I mean I've been in the same house for thirty
eight years and I've been paying insurance all that time,
and only once have I ever made any kind of claim.
I mean, so now, because now all of a sudden,
your insurance company pulls, I mean, really, isn't that what
it's all about?

Speaker 2 (02:23):
Well, I mean it's not. Again, they're not pulling in Texas.
We still have almost two hundred companies that are writing
insurance homeowners insurance in Texas, and so it's not that
they're you know, so far we have not had any
companies pull out of Texas. We are not California or Florida.
But they're definitely going to start re examining across the country,

(02:44):
starting to look at deductibles and.

Speaker 1 (02:49):
Things like that. So, well, what do you expect to
happen with the overall rate of increase in insurance policies
here in Texas? I think think we've seen ten to
twenty percent on average here for the last few years.
What do you expect to see going forward?

Speaker 2 (03:03):
But we have, Yeah, we've seen you know, almost a
thirty to forty percent increase since twenty twenty. Going forward,
we're still you know, as the economy and as inflation
and as lawsuits and as home values go up, we
got to think about. You know, when your home values
go up, that's more to ensure for the insurance company.
So rates are going to continue to go up. I
think they're going to slow down. You know, inflation has

(03:27):
slowed slightly, and so as inflation slows, so well insurance rates.
But we will probably, you know, definitely see increases for
the years to come. I don't think we're going to
move backwards by any means, but yes, insurance rates will
most likely continue to increase.

Speaker 1 (03:45):
All right, thanks so appreciate it. Richard Johnson, Insurance Council
of Texas. I feel you're paying share because I know
exactly what you're saying. You're you're bailing the same house
for thirty eight years. You've been with the same company,
you paid all that, you have tens of thousands of dollars,
You've had one, maybe relatively minor in thirty eight years,
and they pulled the rug out from under you because
you just look at the area and say, whoop, too risky?

(04:07):
What about all the money you put in right doesn't
seem to matter? By point fifty six is our time