To strengthen consumer protections, the Texas Department of Insurance is asking state lawmakers to consider adjusting when new home and auto insurance rates are implemented.
What you need to know
Texas currently operates under a "file-and-use" system, allowing insurance companies to begin using new rates immediately after they are filed, regardless of whether the TDI has reviewed them.
State law requires that insurance rates be "based on sound actuarial principles," be "reasonably related" to expected costs and not result in "unreasonably high long-term profit" for the insurer. The TDI reviews all rates submitted by insurers, although it rarely vetoes them, previous Community Impact reporting shows.
The agency denied a 10% rate increase by the Texas Windstorm Insurance Association in 2024, due to "the hardships a rate increase would impose on the coast." Officials did not reject any of the more than 2,000 rate filings it received in 2025, TDI records show.
In a Sept. 14 letter detailing actions the department is taking to address Texas' high home insurance costs, Insurance Commissioner Amanda Crawford suggested that the legislature look into "adding a delay between a rate filing and its use in the market." Under the current system, if the TDI finds an issue with a new insurance rate, there is "limited" redress for affected policyholders if that rate is already in effect.
Delaying the implementation of new insurance rates would give the agency more time to review the changes, Crawford wrote.
Put in perspective
Twenty-three states have file-and-use systems, according to the U.S. Treasury Department, while 15 states require approval by insurance commissioners before new rates can be implemented and 12 states use other regulatory systems.
The Insurance Council of Texas, the state’s property and casualty insurance trade association, has largely supported the file-and-use system, previous reporting shows. During the 2025 state legislative session, the insurance industry opposed legislation that would have required insurers to get approval from the TDI before raising or lowering rates by more than 10%.
ICT spokesperson Rich Johnson said Texas' file-and-use framework allows insurers to "respond to changing loss conditions."
"The proposal to provide TDI additional time to review filings before new rates take effect merits thoughtful consideration, including an evaluation of how it would interact with the factors affecting insurance affordability," Johnson said in a Sept. 16 statement to Community Impact. "As policymakers consider possible changes to the rate-review process, it will be important to assess the potential effects on consumers, insurers, competition and overall market responsiveness."
On the other side, Texas Watch, a citizen advocacy group focused on insurance issues, has urged the state to move away from the file-and-use system.
“We're paying more and more for less and less coverage,” said Ware Wendell, the organization's executive director, in an April interview. “We need to make sure that the Department of Insurance can stop overcharges before they start, before they are charged to the policyholder.”
Texas Watch did not respond to a request for additional comments before press time Sept. 16.
Crawford's letter included a dozen legislative proposals aimed at reducing property and casualty insurance costs, including:
Creating a grant program to help Texans harden their homes against severe weather
Preventing insurers from passing advertising costs on to policyholders
Requiring 60-day notice when a consumer's policy premium is changing
Standardizing deadlines for home insurance claims and requiring insurers to share those deadlines with claimants
Requiring that all claims be accepted, rejected or denied in writing
Creating courses to educate Texans about basic insurance concepts and the insurance marketplace
"The legislative considerations identified in this memorandum provide additional opportunities for the Legislature to strengthen consumer protection, promote competition and address factors contributing to insurance costs," Crawford wrote.
The background
Crawford's letter comes after Gov. Greg Abbott directed the TDI to take affordability-focused actions in an Aug. 24 letter.
He asked Crawford to prohibit insurers from denying or refusing to renew home insurance policies based on a property’s age; ban the use of personal data in setting insurance prices; create a task force aimed at preventing insurance fraud; study the impact of “excessive, unnecessary and inflated claims” on Texas insurance markets; and require insurers to consider a homeowner’s participation in a roof fortification program when setting rates.
Crawford outlined how the department would implement those requests in her Sept. 14 letter. Ahead of the 2027 state legislative session, the agency will also analyze how property insurers use AI in underwriting and claims, and consider other actions to increase transparency into insurance products and the TDI, she said.
Texans paid the nation's fourth-highest home insurance premiums at the end of 2025, according to the insurance price comparison firm Insurify. State data shows that the average Texas home insurance premium—the amount paid to an insurance company—was $3,506 in 2025, nearly doubling from $1,791 in 2016.
Abbott has noted a 79-percent rise in home insurance premiums in the past six years. He was elected governor in 2014 and appointed Crawford as state insurance commissioner this January.
"High insurance costs hit Texas families hard," Abbott said in a Sept. 16 statement. "I directed TDI to put consumers first, and TDI is taking action to do so."
Gina Hinojosa, an Austin state representative who is challenging Abbott in the Nov. 3 election, previously criticized the governor's Aug. 24 directive.
“Under Greg Abbott, Texas has been one of the most expensive states in the country to own and maintain a home,” she said in an Aug. 24 statement to Community Impact. “If Abbott really wanted to lower costs, he would have done it in the last 12 years he has been governor.”
