USAA to Cut Texas Homeowners Rates for Most Members

USAA is planning to cut homeowners insurance rates in Texas by an average of 5.8% statewide, resulting in annual savings of $83 per policy, the company said.

Rates will go up for some residents in some counties, such as Harris,where the city of Houston is located. To "match its rates with risk presented by projected hurricane losses," rates in Harris County could go up 5% to 20%. In Liberty and Fort Bend counties, found on either side of Harris County, rates could rise 9% and 15%, respectively, USAA said in a statement.

The rate plan was filed but has not yet been approved by the Texas Department of Insurance. The rate changes, if approved, will go into effect Oct. 10 for new policies and Dec. 31 for renewals.

"USAA is strong, growing and financially sound," said Stuart Parker, president of USAA Property & Casualty Insurance Group. "We are pleased to be in a position to provide many of our members with some relief on insurance costs."

USAA, which provides insurance to more than 280,000 homes in Texas, said it also plans to add coverages to policies, such as water back-up and increased limits for theft of jewelry. The insurer said it is looking to increase wind coverage availability in certain coastal areas.

Citing higher costs related to repairs, State Farm Lloyds filed a request for an average statewide rate increase of about 8.5% on homeowners insurance. The company said it is actually operating at a rate deficit of 13.5%. With hurricanes Ike and Dolly as well as many destructive hailstorms in 2008, it was the worst catastrophic year in Texas history, the insurer said (BestWire, July 21, 2009).

Battered by windstorms, homeowners insurers in Texas lost approximately $1.4 billion in 2008, paying out $1.65 for every dollar they made, according to data from the Texas Department of Insurance (BestWire, March 26, 2009).

USAA Group currently has a Best's Financial Strength Rating of A++ (Superior).

In 2008, the top writers of homeowners multiperil in Texas, according to A.M. Best Co. state/line product information based on direct premiums written, were State Farm Group, with a 29.2% market share; Allstate Insurance Group, with 14.1%; Farmers Insurance Group, with 13.2%; USAA Group, with 7.6%; and Travelers Group, with 5.2%.