6 August 8 - 14, 2024 dallasobserver.com DALLAS OBSERVER Classified | MusiC | dish | Culture | unfair Park | Contents Priced to Move In Texas, where natural disasters are common, home insurance rates keep going up. Way up. BY TYLER HICKS S oraya Santos’ house was alive. It spoke in creaks and rumbles; it wore honeysuckle all over its fences. Her mother had filled the backyard with the pear and plum trees of her native Mérida, Yucatán, so the house went to war with the squirrels of Dallas. There was a “massive” pecan tree, too, and Santos, then a young girl and a big fan of Shel Silverstein, dubbed it “the Giving Tree.” “I was convinced it would provide for me in the same way,” she told the Observer, “un- til I was an old lady sitting on its stump.” But in 2006, fast-rising home insurance and property taxes forced Santos’ mother to sell the house on Belmont Avenue. They’d lived there for 36 years, and Santos, now 50 and a community organizer, says the move was so painful that she’s never ventured near her old block. She now lives in Pleasant Grove (which she says hasn’t been gentrified “yet”) and, in some ways, she faces a similar situation. Her home, bought for less than $70,000, is now worth more than $200,000 — and in the last year alone, the cost of her home in- surance has tripled. “I feel guilty even talking to you, because my situation is so much better than what some of my homeowner friends are dealing with,” she said. “But having your insurance and tax triple is still a shock. It kind of makes you wonder what this is gonna look like in five years.” Since 2018, home insurance rates in Texas have risen over 50%: the largest in- crease in the country for that period. Texans now pay over $4,000 on average for home insurance. Worse yet, some insurers are re- fusing to write policies for homes because of the risk associated with hurricane or hail damage. Since insurance is a prerequisite for securing a mortgage, homeowners like San- tos and several others interviewed for this story have to come up with the cash or sell their home — an option that’s unthinkable for most homeowners. “If I sell it, where would I go?” Santos said. “I wouldn’t be able to afford to buy anywhere else.” Canary in the Coal Mine “I nsurance is the canary in the coal mine for climate change,” said David Jones, the director of UC Berkeley’s Climate Risk Initiative. Jones, once Califor- nia’s insurance commissioner, laid out the stakes as clearly and terrifyingly as possible in a Zoom call: “Until we more aggressively and compre- hensively transition away from use of fossil fuels and other greenhouse gas-emitting in- dustries, temperatures are going to keep ris- ing, and we’re going to have more of these events.” By “these events” he means hurricanes and, in Dallas, the storms and hail that are scaring off some insurers. Climate scientists have drawn a clear line connecting global warming and the extreme weather that has ravaged Texas throughout a tumultuous 2024, and they say these extremes are our new normal. One expert report says the av- erage annual surface temperature could rise nearly two degrees by 2036, causing more wildfires, droughts and severe storms. Jones says hail and extreme winds are the biggest threats facing Dallas, and he points to an unsettling stat from the Texas Windstorm Insurance Association (TWIA): The association, which the state created as what Jones calls an “insurer of last re- sort,” had about 70,000 policyholders two years ago. Now there are roughly 265,000 policyholders and, according to the organi- zation’s actuary, Hurricane Beryl may cost the group half of its catastrophe reserve fundings. The rise in TWIA policyholders may be because some insurers are simply refusing to write new policies in Texas. “I don’t think you’ve seen anyone pulling out of Texas, as they have in California, but you have seen insurers being careful about what they’ll insure,” said David Bolduc, the Texas public insurance counsel. Bolduc’s job, in his own words, is to “try to keep rates reasonable.” Insurance compa- nies file their increases, and the counsel can challenge the company if they feel the rea- sons given for the rise are insufficient. Yet Bolduc says his team typically challenges fewer than half of the Increases. “For the most part, I don’t think we see a lot of bad actors,” he told the Observer. “Most companies don’t want to get a ‘no,’ so they tend to adjust downward — or they convince us it’s actually right.” To do that, they provide data on the num- ber of claims, the severity of those claims and the cost of their materials. Dillan Krieg, a research analyst with the housing-focused firm John Burns Research & Consulting, says reinsurance — insurance that is purchased by insurance companies to reduce risk — is another factor contributing to rising prices. But that, too, comes back to climate. “A lot of insurance companies have catas- trophe insurance for themselves,” Krieg said. “They get massive claims that hurt their bot- tom line and make them struggle, and then reinsurance rates continue to go up.” This puts more pressure on insurers who, in turn, pass the pressure on to consumers. Even after forking over piles of cash for a high premium, consumers may still discover that their provider won’t pay for some kinds of damage. “We’re in an age where you need to be more proactive with home maintenance than ever before, because we don’t have the cushion of insurance covering everything,” said Eric Juarez, a Realtor with Great Western Realty. “Now people need reserves saved up, because it might be cheaper to go out of pocket.” That’s what Ted Cole, an 80-year-old res- ident of Irving, plans to do if he ever needs major home repairs. Cole has paid off his home, and he says he has a fairly high risk tolerance. For instance, before it was against the law, he drove around his former stomping grounds in Chi- cago without car insurance. He estimates he has spent more than $40,000 on home in- surance premiums over the years, and in that time, he only filed one claim: He needed a new roof, but even with insurance, he still paid thousands out of pocket. Now that he has made his final house pay- ment, Cole says he is “out of the game”; he’ll no longer be jumping from carrier to carrier in search of the best rate. He’s “not sitting on a pile of cash,” he says, so he’s happy to be done with the insurance expense. Still, he knows what people will say: He’s being risky; someone could slip and fall on his lawn, and if they do, he’s screwed. But that’s a risk the born-again Christian says he has decided to take. “I have a lot of faith in God’s oversight, and the guardian angels, because I think they exist,” he said. “But I know in this world, you can’t ever fully protect yourself no matter what you do.” The American Dream D iane Birdwell is eight months away from being in Cole’s shoes and mak- ing her final house payment. But she plans to take a different approach. “I’m always gonna keep insurance,” she said. “I plan to age in place in this home.” If the 63-year-old had her way, her mother would’ve joined her in the home years ago. However, since the house Mark Graham Soraya Santos says the cost of her home insurance in Pleasant Grove has tripled. | UNFAIR PARK | >> p8
