ARE TEXAS HOMEOWNERS READY FOR THE HURRICANE SEASON?

Buying Good Property Insurance Means Choosing an Insurance Company That Can Weather Any Storm

PALM BEACH GARDENS, FL (June 19, 2018) — Weiss Ratings has named the six strongest providers of homeowners insurance doing business in Texas, declaring that they are financially ready for the 2018 hurricane season, even as weather experts predict more of the same kind of severe storm activity that struck in 2017. At the same time, Weiss Ratings has identified seven weak insurance companies that may not be well prepared and urges homeowners to evaluate a company’s financial strength when purchasing a policy.  

Gavin Magor, Director of Research at Weiss Ratings, explained the risk: “Most home owners simply try to find the cheapest policies they can regardless of a company’s rating. But that can be a grave error. What good is insurance to protect yourself against the risk of hurricane damage, if the insurance company itself is vulnerable to a financial storm of its own? We advise consumers to consider not only the cost but also the financial safety of the insurer. That’s what our safety ratings do, based on how much risk each company takes and on how much capital they have to back it up.”

Among insurers doing $100 million or more of premium business in Texas, the strongest are United Services Automobile Association (rated A- or “Excellent”) and USAA Casualty Insurance Company (A- or “Excellent”). Both insurers are among the 10 largest Texas insurers and have consistently earned an Excellent rating for financial strength.

"In the midst of back-to-back active hurricane seasons,” added Magor, “the good news for homeowners is that, over the last few years, several insurers have set aside more reserves and improved their finances." Based on just released, year-end 2017 data, 55% of homeowner insurers doing business in Texas earned a Weiss Safety Rating of B- (good) or higher, compared to 46% in that category in 2013.

"At the same time," warns Magor, "consumers should remain vigilant regarding insurers with weaker finances. Texas FAIR Plan Association, for example, gets an (E- or “very weak”), which is our lowest rating. It may provide coverage to those that have a hard time obtaining coverage elsewhere, but the FAIR Plan could face serious financial difficulties.”

About 44%¹ of Texas homeowners are still waiting for their insurance claims to come through after Hurricane Harvey hit last year. If the 2018 hurricane season is similar or worse, it could compound the problem, raising questions about the ability of weaker insurers to promptly cover major damages.

Among carriers with more than $20 million in annual homeowners premiums in the state, Weiss Ratings identified seven that merit a grade of D+ (“weak”) or lower:

Before purchasing homeowners insurance, consumers are advised to make sure they fully understand coverage options and check each company's latest Weiss Safety Rating, by signing up for free ratings at weissratings.com/account/sign-up.

About Weiss Ratings: Weiss Ratings provides safety ratings on 19,000 insurers, banks and credit unions as well as investment ratings on 34,000 stocks, mutual funds and ETFs. It accepts no compensation of any kind from the companies it rates. Its sole revenue source is from the sale of ratings and research to consumers, investors and other end users. Weiss Ratings has been praised by Members of Congress, the Government Accountability Office (GAO) and news organizations for its objective analysis of financial institutions and investments. Consumers can sign up for free Weiss Ratings and daily updates here.

¹ Data reported by The Texas Department of Insurance; Hurricane Harvey data call. January 23, 2018