Texas, which regularly gets hit by extreme weather, is one of the most popular places to move to in the United States. The state owes its spectacular population growth — particularly in metro areas such as Houston, Dallas and Austin in recent years — in large part to its reputation for being affordable, pro-business and having lots of spacious homes.
Yet as bigger, more frequent storms pummel Texas, and inflation makes it more expensive to repair and rebuild homes, spiking property insurance costs are challenging the state’s perception of itself as an antidote to expensive coastal cities. Landlords are raising rents to adjust to the higher costs. Home buyers are struggling to find properties they can afford. And longtime residents are facing higher monthly bills, making it more expensive to live in their homes.
Costs are rising across the state, which experiences almost every natural disaster, including wildfires, hurricanes, hailstorms and tornadoes. According to the Texas Department of Insurance, most homeowners don’t pay as much as Dempsey — the average premium was $2,803 in 2023, the most recent data available. But costs are climbing quickly. Premiums rose by nearly 19 percent last year and about 21 percent in 2023.
An analysis by Insurify, an insurance comparison shopping website, looked at policies across the country providing $400,000 in dwelling coverage and a $1,000 deductible. It estimated Texas would be the fifth most expensive state for home insurance by the end of 2025.
State regulators say Texas’s insurance market is healthy. As proof, they point out that nearly 160 companies sell home insurance policies in the state, a count that has held steady over the past three years and is up from a decade ago.
Texas Department of Insurance spokeswoman Mistie Hinote said Texas does not have the same problem as states like Florida and California, where private insurers have dropped coverage, forcing hundreds of thousands of residents into state-backed programs that offer less protection.
“Texas continues to have a competitive property insurance marketplace,” Hinote said in an email.
Birny Birnbaum, an insurance expert who is the executive director of the Center for Economic Justice, a nonprofit consumer advocacy group based in Austin, said Texans do have options — just not good ones.
“Consumers can choose completely unaffordable insurance versus the only affordable option, which is a hollowed-out policy,” he said, “and that’s what the state frames as consumer choice.”