Soaring insurance rates squeeze Texas homeowners. What’s driving the surge?
It’s getting more expensive to protect your home in North Texas.
Homeowners insurance premiums increased 22% in 2024, according to the Texas Department of Insurance, and insurance companies have had to pay out more claims because there have been more severe storms.
The state has had more disasters causing $1 billion in damages in the last five years than the previous decade, according the National Atmospheric and Oceanographic Administration.
While legislators in Austin are working to lower residential property taxes, insurance brokers, Realtors, and industry experts say not much can be done when it comes to insurance — the other major cost of a monthly mortgage payment.
More storms and inflation have pushed rates higher. It’s making housing more expensive, and causing some to fear losing their homes.
What’s driving the cost?
The biggest cost driver in North Texas has been wind and hail, said Chandler Crouch, a Realtor known for helping his clients lower their property tax bills.
Crouch even tried his hand at offering homeowners insurance a few years ago, but found many carriers were avoiding new business in North Texas because of storm losses.
“I’ve been in the business since 2002 and I’ve seen a lot of market changes, and I’ve never seen insurance rates this bad,” he said. “It’s pretty bleak out there.”
Texas ranks at or near the top of states that experience weather catastrophes, including hurricanes, hail, flooding, fire, wind, and tornadoes, said Richard Johnson, a spokesperson for the Insurance Council of Texas.
The cost of materials is also going up, said Frank McArthur, a Tarrant County roofing contractor who primarily works on insurance claims.
It’s not unusual to get a notice from suppliers twice a year that materials are going up 2% or 3%, but about a month ago, McArthur said one of his suppliers told him prices were going up 10%.
He used to not think much of it, because insurance companies were always going to pay, but now McArthur is seeing how rising prices are having an impact on the broader market.
Some companies are increasing deductibles, meaning homeowners have to pay more out of pocket before insurance kicks in.
Instead of a 1% deductible, companies are charging a 2% deductible, meaning on a homeowner with a house valued at roughly $300,000 would have to pay $6,000 on a wind damage claim as opposed to $3,000.
Impact on homeowners
Craig Alsup has been doing missionary work with the group Manna Worldwide for the past nine years. The group works to lift children out of poverty by helping set up medical clinics, orphanages and nutrition centers across the world.
The work is rewarding because it allows Alsup to help alleviate not only what he called spiritual poverty, but also physical poverty through helping to build housing and feed children in 50 countries.
All of the money he raises goes to support that work, so when his homeowners insurance bill went up $3,000 over the past two years, it put more pressure on Alsup to spend more time fundraising to cover the cost.
“It doesn’t limit what we do, but does take some of the focus away from the mission,” he said.
Texas insurance rates impact first-time homebuyers
Insurance prices are also having an impact on first-time homebuyers, said Paul Epperley, president of the Greater Fort Worth Association of Realtors.
When people get pre-approved for a mortgage, lenders aren’t looking at insurance because they don’t know what that person is going to buy, he said.
However, once a buyer gets an insurance quote for a home they’re looking to purchase, banks may not approve the loan if the cost pushes the monthly house payment above a certain debt threshold, Epperley said.
There used to be more stability in the market, so lenders could get a sense of what an insurance premium would be based on the age of the home and the price, but it’s less predictable now, he said.
What can you do about it?
Epperley encouraged home buyers to get an insurance quote as soon as they make an offer. This will prevent them from losing the deposit paid to take the house off the market, also known as earnest money.
Johnson, with the Insurance Council of Texas, also encouraged homeowners to ask insurance companies about discounts for military service or membership in a fraternal organization.
Companies may also offer discounts for mitigating risks to your home like updating your plumbing or electrical system, he said.
A November 2024 report by Texas A&M at Galveston found insurance companies would be willing to offer discounts if the state offered an incentive program to help homeowners fortify their roofs. One in Florida offers low and moderate income residents up to $10,000.
The city of Fort Worth’s Community Repair Program offers grants up to $25,000, but the funding is limited due to a reliance on federal grant dollars.
This story was originally published April 22, 2025 at 1:00 PM.
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