A risky business: Customers are facing high costs to insure Gulf Coast properties
HOUSTON, Texas (KTRK) -- Hurricane season is here, right on the heels of spring storms that swept southeast Texas.
Severe weather events are happening more often and becoming more expensive, making the Gulf Coast a risky business for insurance companies.
Texas leads the nation, accounting for 15% of all billion-dollar disasters, according to NOAA. So even if you haven't had to repair or rebuild after severe weather, that means you're probably still paying for it.
Hurricane Harvey marks the moment homeowners and industry experts said the property insurance market along the Texas Gulf Coast changed. Since 2017, the region has seen three more tropical cyclones, two freezes, six tornadoes, and several instances of localized flooding, according to the National Weather Service.
"The landscape has changed tremendously," Goosehead Insurance broker Jessica McNally said.
McNally described the Texas Gulf Coast as a "hard market" right now, featuring high premiums and deductibles to compensate for the risk of doing business in the region. That means consumers are paying more for coverage and clean-up.
"I'm doing their policies, and the premium differences (are) like astronomically different," McNally said.
RELATED: Insurance rates could climb for some Texas coastal homeowners, businesses
"With a lot of our renewals coming up, I've noticed a big, big increase in our renewals," Nick Logan, a Houston property owner and one of McNally's customers, said.
Logan and his wife buy distressed properties, remodel them, and then rent them out.
One of the properties they own is in the Garden Oaks area. He said within one year's time, the premium for his home insurance policy jumped 300%.
"That was very eye-opening when my current carrier, who I've been with for three years on this policy - same house, no claims have been made - and all of a sudden, I get (triple the) premium," Logan said. "That was quite a shock."
Industry experts with the Insurance Council of Texas said severe weather isn't entirely to blame. Inflated construction costs and labor shortages are also hammering the market.
"We started to notice this upward trend around 2022," Rich Johnson with the council said. "Over the last two or three years, inflation has had a really big impact."
Johnson also said the Texas economy is business-friendly and attracting insurers. However, in an industry all about mitigating risk, protecting property along the Gulf Coast is becoming a high-stakes gamble and leaving consumers with fewer options for good coverage.
"Most importantly, I want to protect my downside risk," Logan said. "With that, it's making sure I identify all the potential risks - whether it's hurricanes here in Houston or, more recently, a tornado came through, making sure I have adequate coverage if something disastrous (were) to happen. If I'm able to do that, I'm able to protect my family against any wealth we have built."
Logan was able to find a more affordable plan by using his broker to shop around for a better policy.
Experts suggest shopping the market, considering bundling deals, and having a good home inspection to know what a home qualifies for.
For updates on this story, follow Briana Conner on Facebook, X and Instagram.
SEE ALSO: Experts say flood insurance is a 'necessity' as hurricane season approaches
