Progressive Insurance has stopped offering new home insurance policies in Texas, as confirmed by the company to WFAA-TV in Dallas. The insurance giant, which dominates the car insurance market in Texas, is shifting focus after a string of extreme weather events have battered the state, putting a strain on insurance providers. This decision impacts new policies only, leaving current policyholders in a state of uncertainty regarding future coverage.
While Progressive has expanded its footprint in the Texas home insurance market since acquiring American Strategic Insurance in 2015, their recent step back comes amid growing concerns about weather-related risks. As reported by the Houston Chronicle, Progressive charts among the top ten home insurance companies in Texas, having written premiums worth approximately $390 million in 2023. Notably, Texas law requires insurers to notify the Department of Insurance when they cease offering a line of insurance, despite the number of companies providing policies in Texas maintaining steady since 2022.
Adding to the narrative, Cathy Treviño, the immediate past chair for the Houston Association of Realtors, shared her insights with KPRC 2, expressing that the absence of Progressive from the new home insurance market could put significant pressure on homebuyers, especially as insurance becomes costlier and less accessible. According to KPRC 2, Treviño cited an upward trend in renewal rates for homeowners' insurance, underscoring the mandatory nature of such policies for those with mortgages.
In a letter to shareholders, Progressive CEO Tricia Griffith outlined the company's strategy to focus on growing in states where weather risk is relatively lower, signaling a deliberate shift in market presence to mitigate the impacts of weather volatility. Her words echo a broader industry pattern, as other insurers like Foremost Insurance have also retreated from the Texan market, pointing to an uptick in severe natural events that increasingly challenge the industry's capacity to manage risk and exposure.
This series of pullbacks arrives on the heels of a 23% rise in Texas residents' average homeowners' insurance premiums during 2023, per an analysis by S&P Global. It represents the most significant jump observed across the United States, with the Houston area—as the Houston Chronicle reports—facing particularly steep challenges due to its susceptibility to storms like the recent Hurricane Beryl.
