Legislators lack key data in tackling insurance issue

As state lawmakers look for ways to rein in rising home insurance costs this session, they are without a key data point that most other states have: where homeowners are being dropped by their insurance providers.

That's because the state's Department of Insurance doesn't collect the information, which advocates say is critical to getting a handle on what parts of Texas have the most immediate need for relief.

State insurance regulators began soliciting the information last year as part of a survey by the National Association of Insurance Commissioners, a trade group representing state insurance regulators. The research was in response to a push by the Biden administration to better understand the financial effect of climate change.

Seven states declined to participate. Texas did participate but declined to request new information from insurers, including ZIP code-level data about where providers don't renew existing customers, known in the industry as nonrenewals.

"If you can't even collect the data to assess the problem, you're certainly not going to be in a position to come up with any answers," said Birny Birnbaum, the executive director of the Center for Economic Justice and a former associate commissioner at the Texas Department of Insurance. He called the lack of data on nonrenewals "astounding ... when you think about all the data that's available for mortgage lending."

A spokesperson for TDI declined to say why the agency doesn't collect nonrenewal data, except that it's not in its official plan that outlines what data providers must submit to the state.

Texas lawmakers have said they want to know where insurance companies are dropping homeowners. At a September hearing, state Rep. Shelby Slawson, R-Stephenville, asked TDI officials if the agency tracked nonrenewals by regions "to know if there are in particular areas that are experiencing more nonrenewal situations than others?"

Mark Worman, TDI's deputy commissioner for property and casualty insurance, said the agency doesn't "specifically track nonrenewals." It does, however, track the state's overall nonrenewal rate. In 2023, for example, 1.66% of policies weren't renewed in Texas, up from 0.88% the year before.

Slawson and other state lawmakers overseeing insurance regulation didn't respond to a request for comment.

The statewide total obscures regions that are known to be experiencing a crisis in availability. In 2024, the U.S. Senate Budget Committee looked at nonrenewal rates across the country and broken down by county, using data submitted by 23 large national insurers. While most nonrenewals were clustered in northern California and Florida, Galveston and Brazoria counties along the Texas Gulf Coast cracked the top 100 counties that saw nonrenewal rates spike since 2018.

The new NAIC dataset, published by the Federal Insurance Office, captures information from 246 million policies written between 2018 and 2022, representing roughly 80% of the homeowners insurance market. In addition to nonrenewal rates, it includes information on claim frequency and severity, loss ratios -- how much insurance companies pay out compared with what they receive in premiums -- and cancellations, which show where homeowners fail to pay premiums.

The Federal Insurance Office didn't respond to questions about Texas' participation, nor did the NAIC.

Insurance executives have called the report flawed. Jimi Grande, senior vice president of federal and political affairs at the National Association of Mutual Insurance Companies, told a trade publication that it focused too much on climate change "to the detriment of understanding what is really impacting consumers and insurance markets that serve them."

But advocates said the findings were an important first step in understanding the insurance market.

"Regulators are going to need to act swiftly on the insurance issue because of the broader systemic risk that a loss of coverage poses to tax bases and to communities," said Zoe Middleton, the Houston-based associate director of Just Climate Resilience at the Union of Concerned Scientists, a nonprofit advocacy group. "And I think it's important to understand whose policies are not being renewed and whether or not mitigation efforts have an impact on insurers' decision making. Right now, it's a complete black box."