Market Conditions in Austin>Question Details

Yvette, Other/Just Looking in Austin, TX

Why is property insurance so expensive in Austin?

Asked by Yvette, Austin, TX Sun Oct 21, 2007

I live in Austin, TX. I had AAA Texas for one year since moving here. It was a reasonable 711.00.
but this year it is almost 1200.00 to renew. The explanation was that construction costs have gone up so much. But get this, I have a rental duplex in Calif that I paid the exact same amount for. Its almost the exact same sq ft. It is insured by AAA southern calif to the tune of 709.00. Does someone have insight to this phenomenon of my Texas insurance hike of 75%???? No claims on either property.

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Here is some insight to this phenomena.
1 vote Thank Flag Link Mon Oct 22, 2007
Unless you changed something, added, etc.. it sounds like they're hoping you just pay some crazy amount for the heck of it.

Call Emily, she'll help you with that. i think she did 50 or so of my transactions last year:
Emily Walsh Sherman
512-637-4180 phone
1 vote Thank Flag Link Sun Oct 21, 2007

I would get several other competitive bids for the same coverage with different carriers. If you are over 50 i would check with AARP (they are insured by The Hartford) and they insurance permiums are very competitive.
1 vote Thank Flag Link Sun Oct 21, 2007
Pam Winterba…, Real Estate Pro in Danville, VA
I have a few properties in Austin and we are not getting 75% hikes. You might want to call around to some different insurance companies.
1 vote Thank Flag Link Sun Oct 21, 2007
There are many different components that make up your premium. To name a few: age, marital status, credit score, how many claims in your area, garaging location, multi-policy account, components of house, age of house, recent storms that have wiped out many insurance profits over the last three years. So, there is not one person you can compare yourself to. I would defintely look at an insurance companies financials when deciding who to go with. You don't want a company that may go insolvent, if a big disaster were to wipe out a whole town.

On another note, something that may help premiums for customers this winter is recently, the Texas State Legislature passed a law restricting insurers’ ability to surcharge for claims. The law states that, "An insurer may assess a premium surcharge at the time an insurance policy is renewed if the insured has filed two or more claims in the preceding three policy years." This means that insurance companies can no longer apply a claim surcharge for the first loss on a property policy. This is great news! This means that some insureds, will be getting a decrease in their premiums if they only have one property claim. Hope this helps
0 votes Thank Flag Link Mon Dec 3, 2007
As a local mortgage broker I run into this issue a lot. Make sure your insurance company is doing the home owner's policy based on the appraised value and not the full replacement cost. This should save you some money
0 votes Thank Flag Link Mon Dec 3, 2007
Price around. Frank Marsh insures most of my investors. And he has my portfolio as well. I think most of his investor policies are from Holheim Prarie . 512-447-3900.
0 votes Thank Flag Link Wed Nov 28, 2007
I live in Austin which falls in the Hays county line. I did some research and found that although I am Austin, my insurance company had been assessing my premium based on Austin FD as my responding FD. This is not the case, as well as there being no continuous water source for emergency retrieval(on wells). But 75% higher!!!! Just thought I'd let others know...
0 votes Thank Flag Link Tue Nov 13, 2007
Bid it out. There are lots of different coverages. Something doesn't sound right. Typical coverage I see from my clients is about 1/2% of the value of the house. You can even get different quotes from different offices of the same company and that doesn't make sense to me. If you live in a duplex perhaps they're calculating the value of the entire building and not 1/2. Maybe your next door neighbor has some negative claims. Also rental coverage should be less. Typically you don't insure the tennants contents, but rather just structure and perhaps some liability.
Web Reference:
0 votes Thank Flag Link Sun Oct 21, 2007
Bruce Lynn, Real Estate Pro in Coppell, TX
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