Texas homeowners facing skyrocketing insurance rates due to severe weather and limited competition
From Yahoo Finance: 2025-06-24 07:45:00
Texas homeowners are feeling the squeeze as insurance costs skyrocket, nearly doubling the national average. Factors driving the rise include severe weather, rising repair costs, inflation, and limited competition among insurers. With premiums climbing, prospective buyers and current homeowners are left wondering how to afford staying in their homes.
The average annual premium in Texas hit $6,000 in 2024 and could surpass $6,500 by the end of 2025. With nearly 70 disasters causing over $1 billion in damage in the last five years, the state faces ongoing challenges. Homeownership in Texas has turned into a financial stress test, with residents struggling to cope with rising costs.
Despite Texas not having a state income tax, the burden falls on homeowners through high property taxes. The average effective property tax rate is 1.63%, one of the highest in the country. Realtors advise buyers to consider insurance costs upfront, as premiums could price them out of homes. Legislation has focused on property tax relief, leaving insurance rates largely unaddressed.
Homebuyers in Texas should factor in insurance costs from the start. Estimates should include home insurance and property taxes to accurately assess affordability. Older homes or those in high-risk areas may come with higher insurance costs. Requesting a CLUE report and exploring bundling discounts can help save on premiums, as can shopping around for quotes and seeking additional discounts.
For current homeowners, preventative upgrades and annual policy re-shopping can help reduce costs. Improvements like reinforced roofing and updated wiring can lower risk profiles and qualify for discounts. Loyalty doesn’t always pay in insurance, so exploring different providers annually may lead to better coverage at lower rates.