Texas announced that home and auto rates are trending down. The state's largest homeowners insurer is raising rates on most of its policies the same season. Here is how to handle the gap before your clients call about it.
On October 8, the Texas Department of Insurance put out a release titled "Home and auto insurance rates trending down for many Texans." It said most homeowners carriers that filed rate changes since July 1 proposed decreases, affecting about 700,000 policyholders, and that filed homeowners changes over the past 90 days averaged a 4.3 percent decrease. The governor and the commissioner both quoted it. Local news ran it the same day.
The next day, a 13 Investigates review published through AOL reported that the 4.3 percent figure is a simple average of every company's filing, unweighted by premium volume or policy count. TDI confirmed that to the reporter. The same review found that State Farm Lloyds, the largest homeowners insurer in Texas, filed a 4 percent statewide increase on July 29, effective for renewals starting November 1. By State Farm's own estimate in the filing, about 751,000 of its roughly 987,000 Texas homeowners policies would see increases and about 234,000 would see decreases. More than 135,000 would rise 10 percent or more.
You do not need to be in Texas for this to matter. Every state where a regulator or a trade group announces a rate trend produces the same gap between the headline and the individual renewal. Texas just produced an unusually clean example of it in one week.
What the Average Actually Measures
A simple average of filings counts a small regional carrier's 10 percent cut exactly the same as the largest carrier's 4 percent increase. Since July 1, TDI's filing data shows 26 homeowners decreases and five increases, so the average leans negative. But the five increases include the carrier with the most policies in the state, plus Amica Mutual at 4 percent and AIG Property Casualty at 15.2 percent.
The release also counted policyholders getting cuts without counting policyholders getting increases. State Farm's 751,000 increases alone exceed the 700,000 policyholders TDI said are getting cuts across all companies combined. Both numbers are accurate. They just answer different questions.
Why This Lands on Your Desk
Your client heard the headline. If they are with a carrier that filed a cut, the renewal will match the story and you will hear nothing. If they are with a carrier that filed an increase, or with a carrier that filed a cut but moved their territory or their rating tier the other way, the renewal will contradict the story. The first call they make is not to the news station. It is to you, and the question will be some version of whether you missed something.
A rate filing is a statewide average across a carrier's book. The 13 Investigates review noted State Farm's own county breakdown ranged from 3.6 percent in Harris County to 5.8 percent in Montgomery County, before any change in the client's own rating factors. A filed decrease does not mean every policy goes down, and TDI's own release says so in plainer words than most consumers will read.
The Renewal Conversation
Get ahead of it. Pull your renewals for November and December by carrier. For any carrier that has filed an increase in your state, flag those accounts now and send a short note before the renewal hits. Tell the client what the carrier filed, what the effective date is, and that you will review options at renewal. A client who hears it from you first reads the increase as managed. A client who hears it from the declarations page reads it as neglected.
For carriers that filed decreases, do not assume the client will see one. Compare the renewal premium against the expiring premium before it goes out, and if it went up anyway, be ready to explain why in terms of the specific policy. Claims, roof age, a reinspection, a change in territory relativity, or an inflation guard adjustment are the usual reasons. The AOL report notes State Farm's own estimates exclude the effect of inflation coverage, which means the real change on a given policy can be larger than the filed number.
If the client wants to shop because the headline told them rates are falling, let them, and do it with them. The commissioner's quote in the release told Texans to shop around. Your job is to be the one doing the shopping so the client does not do it with a direct writer or a quoting site that will not explain the coverage differences.
What to Do This Week
Check your state's rate filing search. Texas publishes filings on the TDI site and most states offer something similar through SERFF. Look up your top five carriers by policy count and note any filed changes with effective dates in the next 90 days.
Build a one-paragraph explanation per carrier that you can paste into an email. Carrier, filed change, effective date, what it means for an average policy, and an offer to review.
Send it to the affected accounts before the renewal does. A rate headline is a conversation starter whether or not it matches the policy, and the agent who starts it is the one who keeps the account.