Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or ratings.
Finding a good home insurance policy at the right price is a top priority for many Texas homeowners. The best way to do this is by comparing purchases. We've looked at the average rates of the top Texas home insurers to help you find the coverage you need at a reasonable cost.
Cheap Texas Home Insurance Cost Comparison
|Company||Average Annual Premium in Texas|
|IAT Insurance Group||$ 2.257|
|United States to||$ 2.723|
|automatic mutual status||$ 2.739|
|state farm||$ 3.437|
Related: The best home insurers
Texas weather makes insurance battlegrounds
Texas is a tough state for weather. And no one knows this better than homeowners. . . and Texas home insurers. The Lone Star State is hit with baseball-sized hailstones, massive power outages, hurricane flooding in the Gulf and, in the other direction, tornadoes and blizzards coming out of the Panhandle.
“We generally lead the nation in hail claims, have 367 miles of coastline, and most of our metropolitan areas are in Flash Flood Alley,” says Ben Gonzalez, a spokesman for the Texas Department of Insurance.
Owners' repair costs are passed on to insurers in the form of claims. "Our home insurance rates tend to be among the five highest in the nation," admits Texas Board of Insurance executive director Albert Betts, "but that's because of the risks of severe weather."
And 2021 is going to be another monster year, even by Texas standards. In February, winter storm Uri froze power lines in the Midwest, leaving nearly 10 million people without power or water in what became known locally as theTexas energy crisis.As the costliest non-hurricane event on record in the state, Uri cost Texas homeowners and their insurers more than $6 billion, or more than half of what insurers collected in premiums last year.
The Law of the Blue Canvas
The size of insurance claims and expected losses have reignited an ongoing battle over whether homeowners get their fair share after accounting for their losses from torn roofs, frozen pipes and sewage, just to name a few. Consumer advocates allege that a 2017 law, scornfully known as the "Blue Canvas Law," skewed the odds in favor of duped insurers and homeowners.
"This adds delay, cost and risk to the claims process and allows insurers to overwhelm policyholders by forcing them to accept underpayments," says Ware Wendell, executive director of Texas Watch, a consumer protection group. In practical terms, this means that if a home insurance company only pays for three-quarters of a damaged roof, it will leave the homeowner with a “blue tarp” that covers the rest, he says.
Insurers respond that the 2017 law was a necessity. "Rapportunistic lawyers" were using severe weather events to sue them for "exaggerated damages" before they had a chance to respond to the homeowners' claims.
Weather-related lawsuits increased 1,400% in the years before the law was passed, with some attorneys filing as many as 300 lawsuits at a time, Betts says. It's the same problem in other storm-battered states like Florida, where local insurers have gone bankrupt and the state recently passed a law restricting rooftop advertising.
A breather for Texas home insurance companies
So what does Blue Tarp actually do? More important,requires an ownerwho want to take legal action against their insurer due to “forces of nature” who provide “written notice” at least 61 days before going to court.
The homeowner, who has likely unsuccessfully negotiated with the insurer and has now retained an attorney, must provide a "statement of facts" about the claim, the amount owed, and the costs of attorney's fees already incurred. The insurer would then have the right to inspect and photograph the damage.
Almost equally important, the law caps the amount of attorneys' fees in a complicated formula based on the final judgment or actual agreement.
The law can delay the claim process if the homeowner and the insurance company cannot agree, which is a disadvantage for homeowners who want to repair and rebuild as quickly as possible. This can make it difficult to hire lawyers to handle homeowners' cases against insurers because of the rate caps they charge.say the lawyers for the owners.
The law also gives insurance adjusters who come to the house to assess immunity from damages from being sued, as long as the insurer takes responsibility for their actions. The lawyers argue that an out-of-state insurer could force a Texas homeowner who wants to sue in federal court to suffer further delay in settlement.
But insurers say the law actually helps most Texans. "This will minimize the increase in home insurance rates that resulted from the recent explosion of lawsuits," according to an industry position paper.
Definition of a hard line
“We are monitoring the effect of the Blue Tarp Act on insurance claims,” says Texas Watch's Wendell. While the complaints about Uri's insurance settlements keep coming, there have been media reports from the hardest-hit upstate part where homeowners with minor damage can't seem to get what they consider a fair settlement, he says. .
Some hired their own public adjusters to offset the lower estimate made by the insurer's representative, but that didn't work. “The insurance company took a pretty hard line,”says a public adjusterwho inspected a home in Garland, Texas, for its owner.
Don't count on too much help from your state Department of Insurance. OneTelevision station from Austin, Texasfound that "most of the time the state has no power to do anything, leaving you, the consumer, without many resources."
In one case, a homeowner was told that because storm damage only affected part of his roof, the insurance company would not replace the entire roof. Insurance department records show the company helped in only one of the five cases, according to the TV station's investigation. He told the rest of the plaintiffs to "hire a lawyer."
Lower home insurance costs in Texas on the horizon?
Neither the Texas Department of Insurance nor the insurers themselves say homeowners insurance premiums will drop because of the 2017 law, but they have seen a slower rise in the past two years. Insurers' claim rates have definitely improved, according to the department's statistics, making insurers' bottom lines look better.
Texas Home Insurance Cost Factors
Your ability to find cheap homeowners insurance in Texas will depend on several cost factors, including:
- The cost of rebuilding the house.
- The materials your house is made of
- the age of the house
- Your personal claims history
- The claims history on your property
- Fire classification of your location
- The amount of coverage you choose
- Your policy limits
- Your deductible amount
- you credit
Related: Cheapest home insurers 2023
What does home insurance cover?
A standard home insurance policy is also called an HO-3. Covers your home for any problem that is not excluded in the policy, such as flooding.
Your home insurance policy covers your personal belongings for specific "perils," which is trouble insurance jargon. Vandalism, theft, fires, explosions, and tornadoes are just a few examples ofproblems covered by home insurance.
Here are the main types of coverage you'll find in a standard homeowners insurance policy:
- Accommodation:This pays for rebuilding or repairing your home if it is damaged. It also covers your attached structures like a porch or garage.
- Other structures:This compensates for the replacement or repair of structures that are not attached to your home, such as a shed or fence.
- personal property:It pays to replace or repair your personal belongings after a problem like a fire or theft. This includes items such as furniture, artwork, clothing, kitchen utensils, rugs, and other items.
- Responsibility:This pays for property damage and injuries you accidentally cause to others. For example, if someone trips on your sidewalk, liability insurance can pay for medical bills, court costs, judgments, and court settlements.
- Medical payments to third parties:This covers minor medical claims made by people who do not live in your home, regardless of who is at fault. For example, if a guest stubs their toe on your coffee table, medical payments coverage may pay for their urgent care visit. Coverage amounts are usually small, like $1,000.
Compare home insurance quotes
home insurance rates
Via Lemonade's secure website
home insurance rates
Compare rates from participating carriers in your area at Policygenius.com
home insurance rates
Compare rates from participating carriers in your area at Policygenius.com
Related: How much home insurance do you need?
What does home insurance not cover?
A homeowner's insurance policy does not cover every problem that occurs in your home. Common exclusions in a standard homeowner's insurance policy include issues such as floods, sinkholes, earthquakes, nuclear hazards, power outages, wear and tear, war, intentional loss, and insect and vermin infestations.
Be sure to read your policy carefully to understand what is covered and what is excluded from coverage.
Texas homes at risk of wildfire damage
More than 38% of properties in Texas have at least a 0.03% chance of being damaged in a fire this year. There are almost 4.6 million properties in the Lone Star State, according to aFirst Street Foundationreport titledfeeding the flames.
The report says that counties like Jackson, Hopkins and Lavaca are at much higher risk of wildfires than they were just 30 years ago. The First Street Foundation says that environmental changes have contributed to the increased risk, including higher temperatures, drier conditions, lower humidity and drier vegetation.
Texas counties with the most properties at risk of wildfires in 2022
|County||Number of properties with at least 0.03% risk this year||Percentage of properties with at least 0.03% risk this year|
|Source: First Street Foundation|
Most Common Disasters in Texas
Property owners in Texas have to deal with various disasters. While severe storms, hurricanes, tornadoes, and flooding pose serious threats, wildfires are by far the most common disaster reported in the Lonestar State.
The worst fire in Texas history was the Bastrop County Complex Fire. On September 4, 2011, after an extremely hot and dry summer, three fires broke out near Bastrop State Park. Strong winds from nearby Tropical Storm Lee would help fan the flames, which took more than six weeks to fully contain. More than 1,600 homes were destroyed and two people died as a result of the fire.
|Disaster Declaration Type||Number since 1953 not Texas|
|strong ice storm||1|
Disasters by month in Texas
March, April and September have historically been the busiest months for declared disasters in Texas.
Disasters per year in Texas
The Bastrop County Complex Fire, the most destructive fire in Texas history, stands as the most memorable disaster of 2011. But that same year there were 57 declared fire disasters. Another notable fire that year was the Possum Kingdom Complex fire caused by lightning on April 11, 2011. The fire would last 34 days on 126,734 acres and destroy 168 homes.
Texas flood insurance
The standard homeowner's insurance policy does not cover flood damage. Since Texas has hundreds of floods every year, it's a good idea to haveflood insurance.
But the vast majority of Texans don't have flood coverage. The Texas Department of Insurance says there are only 753,000 federal flood insurance policies in the Lone Star state. That compares to about 5.3 million homeowners insurance policies.
The Department of Insurance estimates that only 14% of Texas homeowners have flood insurance, even though a standard home insurance policy does not cover flood damage.
This leaves homeowners at risk if their home is flooded during a storm, whether it be a major storm like Hurricane Harvey or a more common storm that can dump a few inches of water in a few hours.
On August 25, 2017, Hurricane Harvey made landfall in the Houston area, dumping nearly 50 inches of rain. More than 150,000 homes were flooded. It is estimated that about 80% of the victims did not have flood insurance, according to Robert Hunter, director of insurance for the Consumer Federation of America.
|Again||Number of floods in Texas|
Government financial assistance after a flood may be limited or unavailable. The best thing you can do is have your own flood insurance that you can trust. Most people who buy flood insurance get it from the National Flood Insurance Program, a federal program. You can also buy flood insurance on the private market.
FEMA's Individuals and Households Program (IHP) can provide direct, cash assistance after an emergency or major disaster (such as a flood), if you qualify. This program helps people find housing after a problem directly caused by a disaster, as long as it is not covered by insurance or other sources.
|NFIP Average Flood Insurance Claim Payment||Average IHP Pay in Texas|
|$ 54.200||$ 7.300|
Tips for buying home insurance
First-time homebuyers and long-time homeowners want the same thing: good coverage at a reasonable price. Here are some tips for buying homeowners insurance in Texas:
- Find out how much it will cost to rebuild.Your homeowner's coverage must be adequate enough to cover the costs of rebuilding your home. Ask a reputable contractor or your insurance company how much it would cost to rebuild your home with fair materials and labor costs in your area.
- Evaluate your assets.Your liability coverage should be adequate enough to cover what you could lose in a lawsuit (such as your savings) if you were sued for an accident.
- Evaluate your high value items.The standard homeowner's insurance policy generally has sublimits for certain types of valuable items. It is a good ideaschedule personal propertythen your expensive possessions are insured for what they're worth.
- Fill coverage gaps.Your home may have specific needs that simply aren't covered by a standard homeowner's insurance policy, but you can often purchase additional coverage to close coverage gaps. For example, you may want to add water backup or sewer coverage to pay for damage caused by drains and sewers.
- Ask about discounts.You may be delighted to know that features in your home qualify you for discounts, like home security devices. You can also get a discount on multiple lines ifcombine your auto and home insurance.
- Go with a financially sound company.You can verify the financial strength of your potential insurer with companies like A.M. Best or Standard & Poor's.
- Get multiple quotes.Insurers value their policies differently, so it's critical to gethome insurance quotesfrom various insurance companies before purchasing a policy.
Average home insurance rates were calculated using data from Quadrant Information Services. Rates are based on a policy with residential coverage of $300,000 and liability coverage of $100,000.