Evolving weather patterns in Texas are significantly impacting the condominium insurance market according to Tim O’Rourke, an expert in condo association coverage. Recently, Tim explained how extreme weather is driving roof and pipe claims, which in turn is causing insurance carriers to exit the Texas condo market. He also outlined solutions his firm, Condo Insurance Pros, is providing to help associations find affordable coverage despite fewer carrier options.
Freezing Temps Causing Burst Pipes
One of the major weather factors Tim highlighted is freezing temperatures that are catching many Texas buildings off guard. “Texas has experienced some pretty harsh freeze-thaw cycles and a lot of those buildings built in the 70s and 80s weren’t built to anticipate having freezing weather for three, four days. So, their pipes freeze and burst,” he explained.
Much of the Texas condo building stock was constructed during a temperate period and lack adequate insulation or freeze protection systems to withstand extended sub-freezing weather. When Arctic cold fronts push into the state, the result can be thousands of dollars in claims from burst pipes. This represents a risk many insurers are no longer willing to take.
Hailstorms Damaging Roofs
In addition to freezing pipes, wind and hail are increasingly causing roof damage according to Tim. “Wind and hail are major issues. There’s significant hail damage—even in Texas, where they’re getting hit with hail that causes substantial roofing damage,” he said. With roof replacement easily costing into the tens of thousands of dollars, hail damage claims can quickly multiply into massive losses for carriers when a major storm impacts dozens of condo buildings in a metropolitan area.
Tim pointed out that unlike many other states subject to regular hailstorms, much of the building stock in Texas was not constructed with hail resilience in mind. This leaves many older condo roofs vulnerable to catastrophic damage from hail, especially as storm patterns evolve. For insurance companies assessing risk, this represents an unpredictable liability.
Insurance Carriers Leaving Texas
The end result of burst frozen pipes and damaged roofs is insurance carriers exiting the Texas condominium market entirely. “Weather pattern changes have significantly impacted Texas. Many of these non-standard carriers either exclude wind and hail coverage or require us to purchase it elsewhere. Alternatively, they may impose a percentage-style deductible,” Tim explained. With exclusions and high deductibles rendering policies essentially useless in the event of a major claim, carriers have determined the risk far outweighs the reward of insuring Texas condos.
Tim pointed out this dynamic where unpredictable weather claims prompt carrier exit has played out repeatedly. “Insurance went really crazy a few years ago, and it’s not that it’s coming back down, but it may have just settled for a moment. We’re hoping that as we have that settle and things start to become predictable. Your rate two years ago doubled—I mean, the amount you were paying doubled or tripled in some cases—and the coverage became less comprehensive while you pay three times as much,” he said. Until weather patterns stabilize somewhat, insurance costs and availability will likely remain unpredictable, according to Tim.
Providing Coverage Through Specialized Carriers
To help fill the market gap left by exiting carriers, Condo Insurance Pros leverages relationships with niche insurance companies specializing in particular segments of risk. For example, Tim explained partnering with carriers focused exclusively on wind and hail coverage in hurricane-prone regions.
“Should we not offer wind and hail and take the wind and hail to a carrier that understands the market?” he posed. “And when we combine them, can we build something long-term sustainable at a fair price for the client that still doesn’t put the carrier at risk?” This strategy of splitting coverage across carriers with different specialty expertise helps mitigate the impacts of Texas’ unpredictable weather on individual insurers.
Through a combination of expertise and adaptation, Condo Insurance Pros aims to provide solutions amidst the challenges of evolving Texas weather. Tim emphasizes taking a proactive, creative approach to help condo associations secure affordable coverage despite unpredictable conditions. Though the forecast remains murky, his innovative use of niche markets provides a ray of sunlight cutting through the clouds.
Check out Tim O’Rourke’s LinkedIn profile and website to learn more about him and Condo Insurance Pro.
