We released a new TV ad this morning showing how Texas home insurance premiums have skyrocketedto an unbearable $1,448 for Texan families - 76% higher than the average U.S. premium of $822.
Why are rates in Texas so high under Governor Perry? In our new TV ad we explain why and show how Perry's made it even harder for Texans to make ends meet.
Insurance companies under Governor Perry made out like bandits with $14 billion in profits thanks to a law pushed and signed by Governor Perry.
This law was exploited by insurance companies as reported by Texas Watch, and ended up being a massive boon for the insurance industry.
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Just how did insurance companies fare so well? Because the bill was so full of loopholes large enough to fit a semi. This report by Texas Watch explains how the insurance industry got away with their abusive increases in home insurance premium rates:
Insurers asked the Legislature to lessen regulation on rates by doing away with the flex-band system and moving instead to the "file and use" system.
Under the file and use system, insurers must simply inform TDI of any rates it intends to charge, then may begin immediately charging that rate. In exchange for this pro-industry compromise, the Legislature demanded that most insurers submit to rate regulation by closing the Lloyd's loophole.
Thus TDI by rule in 2002 and the Legislature through SB 14 in 2003 completely deregulated standardized forms and allowed insurers to assess rate increases immediately and without TDI's approval. Additionally, SB 14 allowed insurers to use credit scoring in all of their companies (not just the high risk mutual companies). This massive overhaul of industry regulation has been a boon to the insurance industry."
Now that law's a dream for insurance company profits, and a nightmare for the pocketbooks of Texas families. Texans are rightly outraged about these excessive hikes in home insurance rates, especially during a recession, and they've demanded action on this issue only to be ignored by Governor Perry:
Gov. Perry backed "file and use." In Killeen Thursday at a campaign event, Perry declined to talk to a reporter from KWTX-TV about insurance rates.
"We got to roll boys, I'm sorry," the Republican governor said as aides hustled him away.
That was the only thing that Governor Perry could say when confronted about how high home insurance rates has affected Texans. He scurried away like the coward he is. Thanks, Rick Perry! Imagine what he'll do in four more years....
