According to data from the National Centers for Environmental Information, Texas is ranked first in terms of weather-related property damage caused by natural disasters. Tornados, lightning strikes and tropical storms cause the most damage, with more than 100 individual instances causing $1 billion in damage since 1980. With these stats in mind, it becomes easier to see why homeowners insurance is important in Texas.
We at the MarketWatch Guides team have reviewed the best homeowners insurance companies nationwide based on coverage, cost and more. Our top picks for the best home insurance in Texas are Allstate, State Farm and USAA based on how they scored in our comprehensive methodology.
What Is the Average Homeowners Insurance Cost in Texas?
The average cost of homeowners insurance in Texas is $5,137 per year which is higher than the national average of $2,511 according to our analysis of homeowners insurance premiums using data provided by Quadrant Information Services. This is due to the state’s high risk from severe weather events including hurricanes, tornadoes and hailstorms.
The annual cost of homeowners insurance can vary greatly based on your specific location which can cause your home to be more or less susceptible to risk. Use the charts below to determine the average cost in your specific area before getting quotes from multiple providers.
Cheapest Homeowners Insurance in Texas
Cost is an important factor in selecting a home insurance company, so we have compiled a list of the most affordable providers in Texas to help you find the best coverage at the lowest cost. The cheapest provider in the state is Armed Forces Insurance at $2,974 annually.
What Factors Affect Home Insurance Rates in Texas?
Home insurance rates will significantly vary based on your location, property details and personal situation. We explain some of these factors below to help you understand how home insurance premiums work.
- Location: In Texas, there’s a major risk of severe natural disasters like hurricanes, tornadoes, flooding and more. If you live in a coastal city prone to natural disasters like Houston or Galveston, insurers will consider it risky to insure your property and charge higher rates. Similarly, Dallas and Fort Worth residents will likely pay higher costs due to tornado risk.
- Age and condition of the property: Older properties in historical cities like San Antonio may be more likely to have structural issues, increasing potential repair and rebuilding costs. This can make older homes more expensive to insure. However, residents in developing areas like Austin may live in homes that adhere to modern building standards and pay lower insurance rates.
- Crime rate: Some areas of Houston and Dallas have high crime rates, which means residents will pay higher premiums due to an increased risk of theft and vandalism.
- Proximity to fire stations: Policy costs also depend on whether you can access sufficient local fire protection from your property. For example, if you live in a rural area of West Texas, your rates will likely be higher than those in a more populated and serviced area.
- Property replacement cost: Insurers also consider how much it would cost to rebuild your home in the event of total damage. The higher the rebuilding cost, the more you will pay for insurance.
- Credit score: Although some states do not allow the use of credit scores to determine rates, Texas is not one of them. If you have a lower credit score, you will pay higher premiums.
- Claims history: Insurers will consider you risky to insure if you have filed multiple claims in the past and charge you higher rates for a policy.
We have put together the following map highlighting the top home insurance risks faced by each county in Texas using the National Risk Index (NRI) scores calculated by the Federal Emergency Management Agency (FEMA).
How To Save Money on Texas Home Insurance
Although the cost of home insurance in Texas is higher than the national average, there are steps you can take to lower your premiums.
Modify Your Deductible
You can lower your premium by choosing a policy with a higher deductible — but this will result in more out-of-pocket expenses in case of damages. We recommend choosing a deductible amount that balances potential savings and financial impact in case of a claim.
To decide on the right deductible, assess your financial situation and frequency of claims. You might also have to consider your lender’s requirements if you have a mortgaged property.
Consider Your Credit Score
In Texas, insurers can consider your credit history to determine how much you will pay for a policy. You can qualify for a lower rate with a good credit score. However, If you do not have a strong credit history, improving it can be a long-term strategy to reduce insurance costs.
You can improve your credit history by paying your bills on time, settling outstanding debts and regularly reviewing your credit reports for errors.
Shop Around
Every insurer has different underwriting criteria, which means rates will differ between companies. We suggest you gather quotes from multiple providers and compare rates to ensure you get the best deal. You can use our resources to compare home insurance quotes from top providers or tools like helpinsure.com by the Texas Department of Insurance.
How To Insure a Coastal Home
In theory, insuring your coastal home follows the same process as insuring an inland property. However, things tend to be more complicated. Most providers won’t cover homes near the coast due to the high potential for damage from weather catastrophes like storms, flooding and beach erosion.
To insure your home along the Gulf, you’ll need coastal home insurance. This is a stand-in for standard home insurance, providing all the same coverages, such as dwelling, other structures, personal liability and loss of use. Like standard home insurance, it excludes certain protections like flood and earthquake coverage. But because it’s meant for high-risk homes, it typically costs more.
Texas is host to several local carriers that offer coastal or high-value home insurance. If you’ve contacted these providers and still can’t get covered, look into Texas’ Fair Access to Insurance Requirements (FAIR) Plan as a last resort. These programs sell property insurance to those who have been rejected by the voluntary market. They are less than desirable, though, due to their high cost and low coverage.
Tips for Getting the Best Coverage
If you’ve been denied traditional coverage but are determined that coastal home insurance is right for you, here are a few tips to help you find the best coverage for a reasonable price:
- Shop local providers: With many companies pulling out of coastal Texas, you’re likely to find coastal home insurance with private providers in your area that focus on protecting homes at elevated risk for hurricanes. Some options in Texas include EK Insurance, Coastal Insurance and Cabrillo Coastal.
- Choose your coverage limits carefully: Because coastal home insurance is costlier than a traditional policy, weighing your coverage needs can be a delicate affair. Consider things like your risk for damage, budget and emergency savings when choosing coverage limits. Discussing your situation with your insurance agent can also help.
- Add appropriate endorsements: Since coastal home insurance doesn’t cover earthquakes or flooding, it’s important to seek out these additional protections. Additionally, wind and hail damage isn’t covered on the Texas coast, Harris County or Galveston Bay. If you live in one of these areas, you’ll need a separate policy from local agents with the Texas Windstorm Insurance Association.