Abbott campaigns on affordability , wants to lower insurance costs

(The Center Square) – As Gov. Greg Abbott campaigns for his fourth term in office, he’s engaging in a statewide “affordability tour” to discuss his plan to reduce costs for Texans.

Under the Biden and Trump administrations, the cost of goods, services and energy have increased while incomes have remained relatively flat. Inflation, the national debt and government spending are at record highs while the average American struggles to make ends meet, critics of both administrations and Congress argue.

With Texas suffering from extreme weather events, including record flooding and hurricanes, home and auto insurance premiums have increased. One aspect of Abbott’s plan is for the legislature to establish a Texas roof fortification program and to amend state law to allow safe drivers to have access to lower auto premiums, The Center Square reported.

Another is his five-point property tax reform plan to reduce property taxes, which have also increased. The leaders of the Texas Senate and House have again listed reducing property taxes as a legislative priority next year, The Center Square reported.

Property taxes, maintenance and homeowners’ insurance are all factored into the true cost of homeownership, LendingTree says. The company provides a comparison of shopping services for lenders of financial products, mortgages, auto loans, small business loans, personal loans, credit cards, as well as insurance, debt relief services and credit repair. It also publishes financial tips related to these issues.

According to its latest analysis, home insurance comprises 8.5% of a typical monthly housing cost for homeowners with a mortgage nationwide. The analysis compares three major monthly housing expenses: mortgage payments, property taxes and home insurance premiums.

In Texas, this percentage is much higher at 14.4%, the third highest in the country.

“The typical Texas homeowner with a mortgage pays an estimated $331 a month for home insurance, the third highest in the nation and equivalent to $3,969 annually,” LendingTree’s chief consumer finance analyst Matt Schulz told The Center Square.

“Estimated monthly housing costs in Texas total $2,300, including, $1,531 mortgage payment, $438 property taxes, $331 home insurance,” for an estimated median home value of just over $312,000, according to the data.

“Home insurance costs are lower than property taxes in Texas, with an insurance-to-property-tax ratio of 0.76; Texas ranks 26th on that measure,” Schulz said.

Nationally, there “may be signs that home insurance costs are beginning to stabilize. After double-digit increases in 2023 and 2024, rates grew by 6% last year,” LendingTree insurance analyst and licensed insurance agent Rob Bhatt said.

By comparison, Nebraska has the highest home insurance costs in the country, accounting for 20 % of housing costs, according to the analysis. Oklahoma ranks second with home insurance reaching nearly 18% of homeowner costs.

“Nebraska, Oklahoma and Texas all have severe wind and hail risks, and Texas homeowners face additional threats from hurricanes and even wildfires, depending on their location,” Bhatt said. “Insurance companies in these states have priced the potential costs of these types of disasters into their rates.”

Other states with severe weather risks and insurance costs have less costly home insurance, LendingTree notes, adding that state regulatory efforts could address this disparity.

In Hawaii, home insurance costs account for 2.1% of monthly housing costs, in snow heavy Vermont, they account for 3.2%.

Following Hawaii and Vermont, the lowest home insurance costs are in the District of Columbia, New Hampshire, California, New Jersey, Alaska, Delaware, Maine, Massachusetts and Washington, according to the analysis. The states’ property taxes and home values are wildly disparate.

In 13 states, homeowners pay more in home insurance than they do in property taxes, led by Tennessee. The typical homeowner in Tennessee spends nearly double on home insurance (an estimated $284 a month) than they do on property taxes (an estimated $143 a month), according to the data.

Following Tennessee, residents in Alabama, Colorado, South Carolina, Arkansas, Oklahoma, Arizona, New Mexico, Idaho, Nebraska, Mississippi, West Virginia, Kentucky, North Carolina and Louisiana pay more for home insurance than they do in property taxes, according to the analysis.

Colorado homeowners have the highest home insurance premiums in the country, an estimated $5,500 a year, according to the data.