Rising house prices, severe weather and growing inflation have caused home insurance rates in Texas and elsewhere to soar.
Texas home insurance rates have increased 54.5% from 2019 through March 2024, according to an analysis by online lending platform LendingTree. Only Arizona, Nebraska, Illinois and Utah saw larger cumulative increases during that time.
Texas’ increase is above the national average. Home insurance rates in the U.S. are up 37.8% over the same period, according to the report.
Average annual home insurance costs in Texas are $4,647 in 2024, the fourth highest rate in the country and nearly 88% over the national average. The average annual home insurance rate in the U.S. is $2,478.
LendingTree analyzed home insurance data from Quadrant Information Services. The policies offered $350,000 in dwelling coverage. Home insurance rate change data was compiled using RateWatch from S&P Global.
LendingTree reports that a significant portion of the rate increase is likely due to rising home prices. The cost of building materials remains higher than in 2019, making any needed repairs more costly as well.
The average home price in the Dallas-Fort Worth metroplex was $405,000 in April 2024, up 1.5% from the prior year, according to data from the MetroTex Association of Realtors.
Climate change has also put more homes at risk from extreme weather events. Many insurers are increasing their premiums in at-risk areas to deal with rising claims, according to the LendingTree report.
Wind and hail accounted for the most (42.6%) of insurance claims between 2017 and 2021 nationwide. The average loss was $12,913, according to the report. A separate LendingTree study found that billion-dollar disasters involving hail and tornadoes caused the highest amount of estimated damage in 2023.
Texas had 16 confirmed weather/climate disaster events with losses exceeding $1 billion last year, according to data from the National Centers for Environmental Information. Fifteen events were severe storms.
“Texas ranks top five in almost every peril that you think of — whether it’s hurricanes, hail, wind, flooding, lightning strikes, tornadoes, all of those things,” said Rich Johnson, communications director at the Insurance Council of Texas.
Despite concerns about severe weather, insurance companies are not refusing to offer coverage in Texas like some providers have in other states, he said. There are more insurance companies doing business in Texas in 2023 and 2024 than in 2022, Johnson said.
“I think it’s a business-friendly environment,” he said. “Companies are able to do business here. They are able to rate adequately. Despite all the risks and perils that are here, companies are still able to do business.”
