Insurers May Raise East Texas Home Insurance Because of Hurricane Damage Risk

Some insurance companies don't think east Texas is too far from the coast to have damage from hurricane winds. They're thinking of increasing property insurance rates in areas far inland from where hurricanes make landfall.

The companies have developed a new model to measure the risk of hurricane damage.  The model allows insurers to measure more accurately their risk of losses to wind damage.

The company that developed the study expects it will show there's a significantly greater risk for losses to wind damage in hurricane-prone states, and higher risk usually calls for higher rates.

Hurricane Rita in 2005 and Hurricane Ike in 2008 caused millions of dollars in property damage throughout east Texas, even in areas hundreds of miles from where the storms made landfall.

via New hurricane model could sock insurance rates, availability | Prime Property | Chron.com - Houston Chronicle.

A spokesman says instead of raising rates in high risk areas, some companies may decide to simply limit how much coverage they sell, or stop renewing some policies to reduce risk.