Texas Insurers Warned Against Illegal 'Price Optimization' Practices - sanangelolive.com

Price optimization is the practice of charging customers more based on how much extra they are likely to tolerate paying, rather than basing rates on actual risk. Abbott's office confirmed TDI will take action against any company caught using the practice across all insurance products the agency regulates.

The numbers behind the warning are hard to ignore. The average annual homeowners' insurance premium in Texas climbed 79 percent over six years, according to Abbott's statement. For people here in Lubbock, where property insurance costs have been a real pressure point alongside rising home prices and utility bills, that kind of increase hits the household budget directly.

The practical upshot: if your insurer has been quietly hiking your rate not because your property got riskier but because they figured you wouldn't switch, that is now explicitly on TDI's radar.

Texas law already required insurers to set rates based on risk, but Tuesday's announcement signals the state intends to actually enforce that standard rather than treat it as fine print.