Texans Spend More on Homeowners Insurance Than Almost Every Other State

When Texas tops a list, it’s usually something we want to be proud of. However, recent data from NerdWallet shows that Texas is runner-up to Oklahoma for the most expensive homeowners insurance policies in the United States.

NerdWallet analyzed pricing data from more than 100 insurance companies and discovered that on average, Texans pay a whopping $4,400 annually for their homeowners insurance policies. That’s second to Oklahomans, who pay $5,495 annually. According to their report, the national average for homeowners insurance is $1,915 a year, or about $160 a month.

Of course, homeowners insurance policies have a lot of variables that can increase the cost. Your policy will depend on where your house is, your home’s size, and the amount of coverage your property requires. But when you break down the numbers, Texans are paying a hefty sum to insure their homes.

Why is homeowners insurance in Texas so expensive?

According to a report from the Texas Tribune, the worsening effects of climate change have a lot to do with it.

“Texas is prone to hurricanes and flooding, both of which are made more severe by climate change,” the report states. “Now insurance companies are becoming increasingly concerned about more powerful thunderstorms that are wrecking homes with flooding, hail and strong winds, analysts and experts said.”

Homeowners insurance costs can vary significantly between cities. NerdWallets numbers show that Houstonians are paying exorbitant amounts for their policies. On average, a Houston homeowner will pay $6,600 annually for their homeowners policy, while policies in Fort Worth average about $5,335 and Dallas policies come in at $5,045. Compare those figures with the Texas Hill Country metros of San Antonio ($3,590 annually) and Austin ($2,840).

Houston’s high concentration of flood-prone areas and its susceptibility to hurricanes are the obvious culprits on which homeowners can blame skyrocketing insurance costs. In North Texas, high winds, hail, and tornadoes are reason enough for high homeowners insurance costs.

But even when accounting for storms and natural disasters, the Tribune‘s report showed that Texas homeowners insurance policies increased in cost at twice the rate of the rest of the nation. Compare NerdWallet’s numbers to Texas Department of Insurance data that shows the average Texan homeowner paid about $2,124 annually in 2021. That’s an increase of 205 percent over three years.

How to Save on Homeowners Insurance

While you may not be able to change some of the variables in your homeowners insurance policy, here are some tactics you can employ to save money:

1. Shop Around: Don’t settle for the first quote you receive. Different insurance companies offer varying rates and discounts. Compare quotes from multiple providers to ensure you’re getting the best deal.
2. Bundle Policies: Many insurance companies offer discounts if you bundle your homeowners insurance with other policies like auto or life insurance. Consolidating your policies with one insurer can lead to significant savings.
3. Increase Deductibles: By opting for a higher deductible, you can lower your premiums. Just make sure you have enough savings to cover the deductible in case you need to make a claim.
4. Improve Home Security: Installing security systems, smoke detectors, deadbolts, and other safety features can reduce the risk of burglary or damage, leading to lower premiums. Some insurers offer discounts for these safety measures.
5. Maintain a Good Credit Score: Insurance companies often use credit scores to determine premiums. Maintaining a good credit score can help you qualify for lower rates. Pay bills on time, keep credit card balances low, and avoid opening unnecessary new accounts.
6. Update and Renovate Your Home: Upgrading your home’s electrical, plumbing, and heating systems can reduce the risk of accidents or damage, potentially lowering your premiums. Renovations that make your home more resilient to natural disasters, such as reinforcing the roof or installing storm shutters, may also lead to discounts.
7. Review Coverage Regularly: Periodically review your policy to ensure you’re not paying for more coverage than you need. If you’ve made significant upgrades to your home or downsized your belongings, adjust your coverage accordingly to avoid overpaying.
8. Maintain a Claim-Free History: Avoid making small claims if possible, as frequent claims can lead to higher premiums. Reserve your insurance for significant losses and handle minor repairs or damages out of pocket.
9. Consider the Location: The location of your home can impact your insurance premiums. Homes in areas prone to natural disasters or high crime rates typically have higher premiums. Before purchasing a home, research the insurance costs associated with the area.
10. Ask About Discounts: Inquire with your insurance provider about available discounts. They may offer discounts for being a long-term customer or being part of certain professional associations. Don’t hesitate to ask about any potential savings opportunities.