Top 5 Reasons Why Homeowners Insurance is More Expensive in Texas 2022

The most popular way to protect your home and personal property against disasters another hand by purchasing insurance, but many people are surprised to learn that the cost of home insurance varies drastically across the country.

In Texas, home insurance premiums are among the highest in the nation. Why? Although weather conditions may contribute to higher premiums, several other factors come into play when calculating your premium cost with each company you contact.

5 Reasons Why Home Insurance is Expensive in Texas 2022:

Here are some of the reasons why homeowners pay more for their home insurance in Texas than in other states and some tips on how you can save money on your policy without compromising quality coverage or sacrificing protection in the event disaster strikes.

Natural Disasters Are Common in Texas

It may not be common knowledge, but natural disasters are more prevalent here than in other states. From major hurricanes to hailstorms and tornadoes, many homeowners face insurance claims every year. 2011 saw over $100 billion in insured losses from natural disasters. With so much exposure to potential damage, it’s no wonder home insurance premiums are high!

The risk of damage and disaster looms larger here than in other states, so it’s no surprise that homeowners and businesses pay a hefty price for their insurance policies. A recent study shows that home insurance premiums are as much as 10% higher on average compared to rates for other states. Here’s how other factors come into play.

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Natural disasters are common here, but that’s not all. We also have extreme weather, lots of vehicular traffic and poor building codes. If you want to know why your premiums are higher than you’d expect, it boils down to these factors. The biggest contributor? Weather-related damage makes up nearly three-quarters of all insurance claims in Texas! It’s no wonder that flooding alone accounts for $8 billion worth of damages every year!

How to control natural disasters in Texas

While there’s not much we can do to prevent natural disasters, there are steps you can take to minimize their impact. Investing in homeowners insurance is always a good idea; even if you live outside of a high-risk area, damage from storms and floods can happen anywhere. Flood insurance typically isn’t included with standard homeowners insurance and usually costs extra, so read up on what it covers before choosing your provider.

Disadvantages of natural disasters in Texas

In Texas, we have everything from tornadoes to hurricanes, earthquakes and floods. These are all-natural disasters that could cause your house to be damaged. As long as you live in an area prone to natural disasters, your home insurance rates will be higher than they would if you lived somewhere where there was less of a chance of an unfortunate incident happening. Just living in an area with a lot of natural disasters can affect your home insurance premium rate.

Inflation Increases the Cost of Home Repairs

The cost of building materials has increased substantially over recent years due to higher demand, as well as other economic factors. Simply put, it takes more money to fix things now than it did five years ago. This means home insurance providers have to increase their premiums to pay for these rising costs; premiums are just one part of a home insurance policy’s total cost.
It’s important to note that higher premiums don’t necessarily mean a lower quality policy. Many home insurance providers offer protection that goes above and beyond a home’s replacement cost.

The negative effects of inflation in Texas

Inflation has a significant impact on your home insurance. If inflation causes home prices to rise 10% over one year, for example, your property insurance rates will increase as well. The average home value in Houston is $165,700 as of March 2017. So if your policy’s value increases from $3,400 to $3,840 per year because of inflation alone—your yearly rate will be approximately 2% higher than it was before. The good news? Of course No!

Low-Interest Rates Mean Higher Monthly Premiums

The primary reason home insurance premiums are higher here in Texas than in other parts of the country is that we have one of the lowest average interest rates for long-term mortgage loans. Since homeowners and landlords pay for home insurance based on their loan value, lower interest rates mean higher monthly premiums.

Nationwide, long-term mortgage interest rates average 3.7 per cent. Here in Texas, they’re just 2.6 per cent. In New York and Illinois—states where home insurance premiums are much lower than ours—long-term mortgage rates average 4.3 per cent and 3.8 per cent respectively, which is pretty close to their historic averages over the past few decades.

How to control Low-Interest Rates Mean Higher Monthly Premiums in texas

Low-interest rates may be good for mortgage borrowers, but they also make home insurance more expensive. With interest rates so low, many homeowners can afford to purchase more insurance coverage than they would have before. This means that their monthly premiums will go up – and they will continue to increase as long as interest rates remain low.

Home insurance in Texas

Where Can I Find Affordable Homeowners Insurance in Texas?

The best way to find affordable homeowners insurance rates in Texas (or anywhere else) is to get several quotes from local providers. Get at least three—and if you want to cover your home with comprehensive coverage, as most people do, aim for five or six. These are great places to start.
And don’t forget to look into discounts! Most insurers offer a variety of ways to save money on your premium, including bundling multiple policies and insuring multiple homes with one company.

How much is homeowners insurance in Texas?

On average, homeowners insurance premiums cost $1,443 a year, or roughly $125 a month. That’s about 20 per cent higher than national averages. Why?
Insurance rates are based on location, risk factors, and more. If your home is located in a flood zone or near a high-crime area, for example, you may pay higher premiums.

On average, homeowners insurance costs $791 annually in Dallas. Rates go up to $1,127 a year ($99) if you live outside of city limits.

Other factors that influence homeowners insurance prices include a deductible, homeowner’s age and claims history. Your deductible defines how much you will pay out of pocket before your insurance kicks in. Deductibles range from $500 to $2,000.

People under 40 may be charged higher premiums than older people because they’re more likely to claim the road. In addition, a claims history will increase home insurance rates by 10 per cent on average, according to NerdWallet’s analysis of data from five major carriers.

Common causes of claims in Texas?

Fires, flooding, theft and vandalism are all common causes of home insurance claims. In recent years, many homes throughout Texas have been damaged by hurricanes—notably Hurricane Ike, which struck Galveston and parts of Houston in 2008—as well as tornadoes. Though storms can happen at any time of year, inclement weather frequently hits areas along or near the coast.

Home insurance coverage options in Texas

Before purchasing a home insurance policy, you should consider your coverage options. Some homeowners’ policies are more comprehensive than others. If you own expensive jewellery or collectables, for example, it might be worth springing for additional coverage above and beyond what your typical policy offers. On average, most people don’t need it because they won’t be able to afford anything as valuable as what they already have protected by insurance.

Best home insurance companies in Texas Comparison?

To get a true comparison of what home insurance costs are like in Texas, you’ll need to examine quotes from all of your potential insurers. By collecting quotes from more than one company, you can ensure that you’re getting competitive rates and selecting an appropriate policy. Choose from these three: Allstate, Travelers, and State Farm.

Home insurance companies in Texas


While it’s undeniable that home insurance prices fluctuate from region to region, there are some aspects of life in The Lone Star State that contribute to premium costs. If you’re planning on buying a new home or condo and trying to stay within budget, consider this five-k when shopping for your home insurance coverage. Your wallet will thank you.

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