Insurance Issue Stokes Fire in Governor’s Race

Lubbock, TX – Texas Governor Rick Perry addresses a news conference in a cotton compress warehouse in Lubbock, Texas, 7/24/02, after a coalition of 16 agriculture groups endorsed him in his bid for re-election against Tony Sanchez in November.

Republican Gov. Rick Perry and gubernatorial challenger Tony Sanchez, a Democrat, continued to spar Wednesday over concerns about homeowners insurance. Both have promised re forms, but San chez wants faster action – he wants Perry to call a special session of the Legislature to deal with the issue. Perry has said more information is needed before legislators tackle it.

Some premiums have risen as high as 200 percent. Home owners are trying to get new policies, but some restrict coverage. Insurance companies say the problem comes from rapidly escalating losses for mold and water damage, according to The Associated Press. Losses in Texas last year totaled nearly $1.2 billion, more than double the $512 million in similar losses in 2000.

They also say the unregulated market currently under attack helped keep costs down, The Associated Press reported.

Perry told The Avalanche-Journal editorial board Wednesday that Sanchez’s request is politically motivated and that more information is needed before the Texas Legislature deals with the insurance issue.

“We’ve got too much going on. This is too complex an issue to throw everybody into Austin, Texas, during the middle of a governor’s race and races that these other folks have and try to fix when we yet don’t know all the information that is coming back,” Perry told the board.

“I know we need a special session, legislators know we need a special session, homeowners know we need a special session,” Sanchez said in a news release Wednesday. “The only person who does not get it is Perry and the insurance companies that are financing his campaign.”

Ray Sullivan, a Perry campaign spokesman, told the AP that the governor has supporters on all sides of every issue and makes decisions in what he deems to be Texans’ best interests.

The Texas Department of Insurance and the Attorney General’s Office are looking into insurance activities. The investigation is ongoing. Lawmakers also are looking into the issue.

Perry said anecdotal information shows problems with tactics the insurance industry is using.

He said he believes in the free market but that changes are needed in the homeowners insurance industry. Ninety-five percent of Texas policies are exempt from rate regulation.

“We’re going to regulate it. It is that clear,” Perry said. “We’re going to regulate it. We’re going to regulate it tough,” he told the board.

“I’m going to make it an emergency issue when the Legislature comes into town,” he said.

A possible plan could be rate freezes, which would take legislative action, Perry said.

He said he is not surprised by the tone of the campaign, especially in light of the deep pockets of Sanchez, a multimillionaire, and Sanchez’s spirited primary campaign.

Recent expenditure reports indicate San chez has spent $31 million in his race against Perry and his primary race against Dan Morales.

Perry, who did not have an opponent in the Republican primary, has spent about $4.78 million since the first half of the year.

Perry said he couldn’t outspend Sanchez and has had to respond in kind to Sanchez’s ads that are false and misleading. Sanchez’s camp have called their ads “educational.”

Both have complained about negative campaigning against each other.

Discussing education, Perry told the board he wants to provide a curriculum preparation for children in programs before pre-kindergarten, a dropout prevention plan, more investment in technology in schools (especially increased training for teachers and administrators), more mentoring for teachers early in their careers and a master science teacher program, encouraging teachers to become experts in the fields they teach.