Texas has some of the nation’s highest home insurance costs. What’s driving rates?

The average Texas home insurance premium—the amount paid to an insurance company—was $3,291 in 2024, according to the latest Texas Department of Insurance data available. Premiums have increased in recent years, rising by 21.1% in 2023 and 18.7% in 2024, TDI records show. Rate hikes slowed in 2025, when premiums rose by 4.3%.

Texas had the nation’s fourth-highest home insurance premiums at the end of 2025, Insurify, an insurance price comparison company, reported in March. Insurify projected that by the end of 2026, Texas would see a 3% increase in average premiums and become the fifth most expensive state for homeowners insurance.

In recent years, Texas’ propensity for natural disasters has been “the No. 1 driver” behind insurance rate increases, said Rich Johnson, a spokesperson for the Insurance Council of Texas, the state’s property and casualty insurance trade association. Experts say inflationary pressures have also driven up costs.

Texas is home to virtually every type of natural disaster, including hurricanes, floods, tornadoes, hailstorms and wildfires. Those disasters are getting more expensive year-over-year, according to the National Oceanic and Atmospheric Administration.

In 1980, Texas had two weather events resulting in over $1 billion each in losses, NOAA reported. In 2023, Texas saw 16 separate billion-dollar weather events, followed by 20 such events in 2024.

Zooming in

State Rep. Mihaela Plesa, D-Dallas, told Community Impact she is hearing “a lot of fear, a lot of frustration, a lot of confusion” from her constituents when it comes to homeowners insurance.

“People are telling me that their premiums have jumped hundreds, if not even thousands of dollars in some cases,” Plesa said of a March 26 home insurance town hall she held in Collin County. “They're worried about being dropped. They're worried about being pushed into Texas' [last-resort] insurance pools. They're facing deductibles that are so high, they can't keep up with them.”

Texas has two insurers of last resort: the Texas FAIR Plan provides coverage to residents who cannot get it through the private insurance market, while the Texas Windstorm Insurance Association offers windstorm and hail coverage to people living in one of the state’s 14 coastal counties. The FAIR Plan served nearly 128,000 policyholders at the end of 2025, according to the state insurance department, while TWIA had over 262,000 policyholders in mid-2024.

Ahead of this year’s elections, Texas voters named home insurance affordability their second most important issue in a poll commissioned by the nonpartisan think tank Texas 2036. Seventy-nine percent of voters told pollsters their home insurance premiums had increased in the past five years.

“We asked Texans, ‘If an extreme weather event hits your community, what are you really worried about?’” said Jeremy Mazur, who leads infrastructure and natural resources policy for the organization. “The most [common] response we got was that more people were worried about what an extreme weather event would mean for their homeowners insurance premiums, and so that was pretty alarming.”

In Texas and nationwide, lenders require proof of insurance before finalizing a mortgage with a homeowner. Experts told Community Impact that Texans with mortgages are increasingly opting for reduced coverage to save money, while some people who own their homes outright are dropping coverage entirely.

“Older Texans often own their homes outright, with their mortgages fully paid off,” Charles Cascio, a senior associate state director with AARP Texas, told Community Impact. “Some are choosing to go completely without homeowners insurance, and it's an enormous risk to their financial security.”

About 14% of U.S. homes were uninsured in 2024, the online lending and insurance marketplace LendingTree found in a March analysis of U.S. Census Bureau data. Texas had the tenth-highest rate of uninsured homes, the data shows, with nearly 18% of the state’s more than 7 million homeowners going without insurance in 2024.

“Insurance is a big deal, and you don't want to see people go without coverage,” Julia Parenteau, the public policy director for the Texas Association of REALTORS, said. “Hopefully we never have to use it, [but] it could be much worse if you didn’t have it. Because it's so important to have insurance, it's then also really important that we can afford it.”

More details

Texas has a “very competitive, very strong” insurance market with over 150 companies writing homeowners policies, Johnson said. He told Community Impact that rapid population growth and high inflation rates contributed to Texas’ double-digit premium increases in 2022-24, adding that weather risks and rising home values are more consistent factors.

“We all want the value of our homes to go up, but along with that comes more and more risk that insurance companies take on,” Johnson said.

Johnson also pointed to legal costs incurred by insurance companies when homeowners take them to court over denied or delayed claims. He said legislation aimed at curbing “nuclear verdicts”—when victims are awarded $10 million or more in personal injury lawsuits and related cases—would help reduce expenses for insurers and thereby drive down insurance premiums.

A proposal targeting nuclear verdicts did not pass after months of debate during Texas’ 2025 legislative session.

Wendell said it is already “really hard” for Texans to challenge insurance companies in court, citing a 2017 law which mandated that policyholders provide notice before suing their insurers and reduced the penalties companies face if they are found to have underpaid customers.

At the Capitol

Texas can’t legislate weather risks away, but lawmakers have considered some policy changes to help harden homes against disasters and boost regulatory oversight of the insurance industry.

“It's a question of, how can this competitive market ultimately work to the benefit of homeowners?” Mazur said.

One proposed solution, which is backed by consumer advocacy groups and the insurance industry, is to create a state grant program to help Texans weather-proof their roofs and other elements of their homes. A version of that proposal would have required insurers to give discounts to policyholders who make approved upgrades to their homes, but it did not pass last legislative session.

Fortifying homes before disaster strikes is “critical,” according to Doug Quinn, who leads the American Policyholder Association, a national nonprofit that advocates for policyholders. Quinn lost his home during Hurricane Sandy in 2012 and launched the APA after spending years fighting what he said were unfairly paid claims by his insurance company.

“Having lived through a natural disaster and [losing] everything I own, I will tell you that it is way cheaper and way easier to protect your home from the dominant peril in your area—wind, fire, water—than it is to have to go back and try to clean up the mess, fight over who has to pay for it [and] rebuild,” Quinn told Community Impact.

Proponents of the weather-proofing incentive have pointed to other Gulf Coast states like Alabama, which offers grants and premium discounts to homeowners who meet certain fortification requirements.

Last year, lawmakers approved a measure requiring insurers to provide a written explanation when they deny, cancel or do not renew a homeowners policy. Another recent law bars insurance companies from requiring that home and auto insurance policies be tied together.

The debate

A 2025 proposal by Sen. Charles Schwertner, R-Georgetown, sought to require that insurers get approval from the Texas Department of Insurance before raising or lowering rates by more than 10% at a time. It passed the Texas Senate last year with bipartisan support, but was not considered in the House.

Schwertner leads the Senate Business and Commerce Committee, which deals with insurance issues alongside the House Insurance Committee. Schwertner was not available for an interview before press time, but said in a statement that he was “committed to advancing solutions that strengthen consumer choice and keep homeowners insurance available and reliable” ahead of the 2027 legislative session.

“For many Texans, homeowners insurance is becoming more difficult to navigate. Higher costs and fewer available insurers mean families have limited choices when selecting their coverage,” he said in the statement to Community Impact. “During the interim, the Senate Business and Commerce Committee will make recommendations to enhance consumer protections through improved data reporting, identify ways to increase insurer participation, and ensure Texans maintain access to affordable coverage that meets their needs.”

Texas Watch backed Schwertner’s proposal last year, which Wendell said would make insurance companies more accountable to residents. Wendell’s group has pushed for Texas to move away from its “file and use” framework. Under that system, once an insurer files its new insurance rate with the TDI, it can begin using that rate immediately, regardless of whether the state has reviewed it.

According to the TDI, all rates must “not be excessive” and be “based on sound actuarial principles.” The agency reviews all rates submitted by insurers, although it rarely vetoes them.

The TDI denied at least one rate change in 2024, telling the Texas Windstorm Insurance Association at the time that a 10% rate increase was “unjust and unfair because of the hardships a rate increase would impose on the coast.” The TDI did not deny any of the more than 2,000 rate filings it received in 2025, agency records show.

Wendell said Texas’ file and use system “has been a failure for all of us as policyholders.”

“We're paying more and more for less and less coverage,” he told Community Impact. “We need to make sure that the Department of Insurance can stop overcharges before they start, before they are charged to the policyholder.”

Texas’ property insurance industry has opposed attempts to limit rate increases, warning that similar efforts contributed to some insurers reducing or ending their coverage in California and other states.

“What we don't want to see is California, ... where they're artificially suppressing rates, premiums or price controls,” Johnson said. “We don't want to go in that direction, but we do need to mitigate. We know that weather is going to happen, [so] I think we need to start looking at our resiliency policies.”

Others said they did not think it was realistic for state lawmakers to control insurance rates, urging officials to find new solutions to homeowners’ concerns.

“The Texas Legislature is not a governing body that philosophically would say [they’re] going to industry-wide cap rates or cap payments,” Parenteau said. “They're going to try to leave that to be a little bit more free-market and try to figure out what else they can do to mitigate those costs.”

Parenteau added that this doesn’t mean lawmakers and state regulators don’t care about insurance affordability.

“They're thinking about it; they are impacted by it,” she said. “There just, unfortunately, is not a quick fix.”

Stay tuned

House and Senate lawmakers began holding hearings in April on hundreds of interim charges, which will shape their priorities when the 90th state legislative session begins in January. After the information-gathering hearings are complete, each legislative committee is required to release a report on their interim charges and policy recommendations late this year.

Lawmakers and experts told Community Impact they would be “shocked” if the legislature did not address home insurance costs next year.

“The insurance lobby just really has a strong hold on the legislature,” Plesa said. “I think that now, though, lawmakers are going to definitely hear this loud [homeowner] perspective that home insurance affordability is a crisis in our state.”