Summary: Texans face complex reasons for growing home insurance premiums within the state. Because of evolving weather patterns, changing industry trends, and more, home insurance costs are growing. Overall, you can compare carriers to help save money on expensive coverage. Estimated Read Time: 9 mins
Texas home insurance rates have surged in recent years because of many different factors including climate change and inflation. Several additional reasons such as the insurance industry and statewide crime rates also factor into escalating premiums. Many homeowners in the Lone Star State also forgo home insurance coverage only exacerbating the issue.
While Texas homeowners insurance is expensive, understanding the reasons can help you save on premiums when enrolling into coverage. From changing weather patterns to changing industries, below, we’re taking a closer look at just why Texas home insurance rates continue to rise.
Natural Disasters
You’ll find plenty of natural disasters in Texas ranging from severe thunderstorms bringing hail and tornados, tropical weather along the Gulf Coast, and flooding throughout the center. All of these and more are raising premiums for homeowners.
The diverse landscapes also endure unique challenges, such as wildfires, and sinkholes found along the Permian Basin and Balcones Fault Zone. Changing weather patterns are causing rising tides along a sinking Gulf Coastal Plain to complicate matters further.
Population and Crime
Statista data for 2022 ranked Texas 14th in the nation for its burglary rate. There are problems with vandalism and theft and these perils are adding to the risk of protecting your home.
There’s no doubt about it, most Texans are good, hardworking, honest people. However, as populations increase for various reasons, it’s an unfortunately reasonable correlation that crimes such as burglary will also rise as a result.
Housing and Construction Costs
Texas faces challenges beyond natural disasters and a rising population, however, these issues remain tied together due to the real estate market.
Especially in major urban areas such as Dallas, Houston, and Austin, the cost of building a home is going up as construction and inflation rise.
Because it costs more to build a home these days, it means that carriers are going to have to pay more to cover your claims in the event of a loss. Consequently, homeowners bear the burden of elevated premiums because of this economic cycle.
Claims and Lawsuits
Recent trends show a nationwide shift in allowing insured individuals to file bad faith claims against insurers. This trend expands insurers’ vulnerability and considering the history of legal and regulatory hurdles in the insurance industry for Texas companies, carriers are evolving.
Lawsuits concerning weather-related claims bring litigation expenses. Often, these costs trickle down to policyholders in the form of increased premiums. As a result, overall costs are rising because of courtroom battles even if they involve claims and disasters in other states.
Many Uninsured Homeowners
Lastly, another issue affecting the state of Texas is the large number of uninsured and underinsured homeowners. Despite the state’s high insurance rates, many residents either do not have homeowners insurance or carry inadequate coverage.
In the event of a major disaster or catastrophic event, uninsured or underinsured homeowners may rely on government assistance or disaster relief programs, which can strain resources and even drive up insurance costs for all policyholders in the state.
These factors and more all contribute to why home insurance in Texas is so expensive. By shopping around, you can compare coverage from multiple carriers and find the lowest premium for protecting your property.
Texas weather by the numbers
Severe weather is the biggest reason Texas home insurance costs more than in many other states. The Insurance Information Institute reports that Texas had 902 major hail events in 2025, the most of any state and more than twice as many as second-place Kansas. Texas also led the nation with 162 tornadoes in 2025, according to the same organization. Add Gulf Coast hurricanes, flash flooding and wildfires in West Texas and the Panhandle, and insurers have to plan for losses from many directions in a single year.
Hail matters most for many homeowners because it damages roofs, and roof replacement is one of the most common large claims in the state. That’s why many Texas policies carry a separate wind and hail deductible. The Insurance Information Institute notes that under Texas law, the windstorm deductible applies to wind and hail damage from any type of windstorm, not only named storms or hurricanes.
Rebuilding costs, reinsurance and other cost drivers
Weather isn’t the only factor. In a January 2025 report, the U.S. Treasury’s Federal Insurance Office described several overlapping forces that affect the cost and availability of homeowners insurance:
- Inflation and higher replacement costs for labor and materials
- The cost of reinsurance, which is insurance that insurance companies buy for themselves
- People moving into areas with higher climate risk
- State insurance regulation
- Litigation-related costs
- More frequent and more severe climate-related disasters
The same report found that, nationwide, average homeowners premiums per policy rose 8.7% faster than inflation from 2018 to 2022. In the ZIP codes with the highest expected climate-related losses, average annual premiums were $2,321 per policy, compared with $1,277 in the lowest-risk areas. Much of Texas falls into the higher-risk groups for wind and hail.
Population growth
Texas keeps growing. The U.S. Census Bureau estimates the state’s population at about 31.7 million as of July 1, 2025, an increase of 8.8% since 2020. More homes in hail-prone suburbs and along the coast means more insured property exposed to each storm.
How Texas regulates home insurance rates
The Texas Department of Insurance home insurance guide explains that state law requires insurers to charge rates that are fair, reasonable and adequate for the risks they cover. TDI doesn’t approve rates in advance, but if it finds that a company’s rates are too high, it can require refunds to people who were overcharged. Because each company uses its own underwriting rules, one company may be willing to insure a home another company turns down, and prices for the same house can vary widely.
Fewer choices in some areas
When private insurers pull back, homeowners can end up in the state’s residual market. The Texas FAIR Plan Association offers coverage to homeowners who have been turned down by private insurers, but its policies are more limited. The FAIR Plan’s own fact book reports that it is now the 15th largest residential homeowners insurance writer in Texas, a sign of how many homeowners have had trouble finding coverage elsewhere. Our article on insurance providers leaving Texas looks at that trend in more detail.
What affects your own premium
Statewide trends set the baseline, but your price depends on your home. According to TDI, most companies consider:
- Your home’s age and condition. Companies can’t turn you down just because of your home’s age or value, but they can charge more.
- Replacement cost. Homes that cost more to rebuild have higher premiums.
- Construction materials. All-wood homes generally cost more to insure than brick or stone homes.
- Where you live. Premiums are higher in areas with more storms or crime.
- Fire protection. Homes close to fire stations generally cost less to insure.
- Claims history. TDI notes that most companies check the Comprehensive Loss Underwriting Exchange (CLUE), which shows the claims history of people and houses for the last seven years.
- Credit. Some companies use credit information in pricing, but TDI says a company can’t turn you down based only on your credit. The NAIC explains how credit-based insurance scores work.
How to lower your Texas home insurance cost
You can’t control the weather, but you can control some of what you pay.
- Ask about discounts. TDI lists common ones, including monitored burglar or fire alarms, sprinkler systems, impact-resistant roofs, newer homes or homes in good condition, having other policies with the same company and going three years without a claim. Each company decides which discounts it offers.
- Consider a higher deductible. The Insurance Information Institute notes that a higher deductible generally lowers your premium. Choose an amount you could actually pay after a storm, and check the separate wind and hail deductible too.
- Upgrade your roof wisely. If your roof is near the end of its life, an impact-resistant roof may qualify for a discount. See our guide to new roof home insurance savings.
- Insure for rebuilding cost, not market value. The land under your home doesn’t need to be insured.
- Compare companies regularly. TDI and the Office of Public Insurance Counsel run HelpInsure.com, where you can compare home policies sold in your area.
- Bundle and compare. A multi-policy discount can help, but compare the bundled price with separate policies.
An example
Imagine two similar homes in the Dallas-Fort Worth area. One has a 17-year-old composition roof, a recent water claim and no alarm system. The other has a new impact-resistant roof, a monitored alarm and no claims in the past three years. Even with the same coverage limits, the second home is likely to qualify for more discounts and be easier to place with more companies. The specific price difference depends on each insurer’s rules, so get quotes after any major upgrade.
Common mistakes
- Cutting coverage to lower the premium. Lower dwelling limits or actual cash value roof coverage can leave you paying much more after a loss.
- Ignoring the wind and hail deductible. A percentage deductible can mean thousands of dollars out of pocket after a hail storm.
- Assuming flood is covered. Standard home policies exclude flood. See our flood insurance page.
- Filing small claims. Claims stay on your CLUE report and can affect future pricing.
- Letting the policy lapse. A gap in coverage can make it harder to find a new policy and may violate your mortgage terms.
Frequently asked questions
Why did my premium go up even though I didn’t file a claim?
Premiums reflect statewide and regional losses, rebuilding costs and reinsurance costs, not just your own claims. Your home’s replacement cost may also have been increased at renewal.
Is home insurance more expensive on the Texas coast?
Often, yes. Coastal homeowners may also need separate wind coverage and flood insurance, which adds to the total cost.
Where can I compare prices?
You can use HelpInsure.com for a starting point, or request a quote to compare homeowners insurance options for your address.
Sources:
1. A Sinking Situation In Houston, Texas Gulf Coast, Texas A&M Today. Accessed February 2024.
https://today.tamu.edu/news/2021/02/08/a-sinking-situation-in-houston-texas-gulf-coast/
2. Researchers warn that changes in the Permian Basin…,New Mexico Political Report. Accessed February 2024.
https://nmpoliticalreport.com/2023/08/30/researchers-warn-that-changes-in-the-permian-basin-surface-due-to-oil-and-gas-industry-activities-are-leading-to-increasing-number-of-geohazards/
3. Geophysical mapping of Mount Bonnell fault of Balcones fault zone…,SEG. Accessed February 2024.
https://library.seg.org/doi/10.1190/tle35090752.1
4. Bad faith claims against insurers on the rise; how they can remain in good graces, Reuters. Accessed February 2024.
https://www.reuters.com/legal/legalindustry/bad-faith-claims-against-insurers-rise-how-they-can-remain-good-graces-2022-08-18/
5. Burglary rate in the United States in 2022, by state, Statista. Accessed February 2024. https://www.statista.com/statistics/232580/burglary-rate-in-the-us-by-state/
6. Study: Many Texas Households Lack Homeowner’s Insurance, Insurance Journal. Accessed February.
https://www.insurancejournal.com/news/southcentral/2021/07/26/624343.htm
- Facts + Statistics: Hail, Insurance Information Institute (Triple-I)
- Facts + Statistics: Tornadoes and thunderstorms, Insurance Information Institute (Triple-I)
- Background on: Hurricane and windstorm deductibles, Insurance Information Institute (Triple-I)
- Analyses of U.S. Homeowners Insurance Markets, 2018-2022: Climate-Related Risks and Other Factors (January 2025), U.S. Department of the Treasury, Federal Insurance Office
- QuickFacts: Texas, U.S. Census Bureau
- Home insurance guide, Texas Department of Insurance
- Coverage and Eligibility, Texas FAIR Plan Association
- TFPA Fact Book, Q2 2026, Texas FAIR Plan Association
- Credit-Based Insurance Scores, National Association of Insurance Commissioners (NAIC)
- 12 Ways to Lower Your Homeowners Insurance Costs, Insurance Information Institute (Triple-I)
- HelpInsure.com, Texas Department of Insurance and Office of Public Insurance Counsel