Home insurers profited big in '25

Last year was a good one for Texas home insurers.

That's according to the preliminary 2025 financial figures, which were recently made public.

Insurers earned roughly 22 cents for every dollar in premiums they collected -- their best year in two decades. The record profit came after several years of double-digit rate increases for policyholders and flat or slightly negative returns for insurers, meaning they paid more in claims than they collected in premiums.

Statewide, rates increased by an average of 4.3% in 2025, according to the Texas Department of Insurance. That's significantly lower than the double-digit increases in recent years, though homeowners were still paying about 80% more for home insurance in 2025 than they were in 2020 -- roughly $3,500 for an average policy, up from $2,000.

TDI Commissioner Amanda Crawford said in an interview that she is "cautiously optimistic" that homeowners will see some relief on insurance premiums. Rates in Texas are among the highest in the country, largely because climate change is increasing the frequency and severity of storms.

Given the profits reported last year, Crawford said insurance companies should "strongly consider whether or not a rate decrease might be in order."

"We're certainly seeing a leveling off," she said in an interview. "We haven't quite seen a decrease yet."

There's little the state agency can do to force companies to charge less. Texas is a file-and-use state, which means insurers can change their rates without waiting for state approval.

Crawford, who was appointed by Gov. Greg Abbott in February, said one of her priorities in her new position is greater transparency for consumers.

In June, the agency published a database that allows Texans to more easily search its existing records to see if their home or auto insurance company has filed to increase their rates. TDI also published a map with average annual premiums in every Texas county since 2019, as well as how much companies paid in claims in those counties for damages like wind or hail.

Crawford said she hopes the data encourages Texans to shop around for insurance.

Insurers have defended the strong returns last year as unusual, saying one good year can be wiped out by a bad storm. "Part of what you're looking at in 2025 is a really good weather year," Beamon Floyd, the executive director of the Texas Coalition for Affordable Insurance Solutions, told lawmakers during a hearing in June. "And that is not a thing that is reliable in the long term in Texas."

Lois Parshley, a research director at the nonprofit Public Citizen and the author of a new report looking at insurer profits nationally, agreed that the industry's exceptional profits last year were due in part to being "meteorologically fortunate."

But she noted that, as a result, insurers now have record reserves, as investment income hit an all-time high in 2025.

Companies typically invest the premiums they receive, earning income on that money before it's paid out in claims.

"These reserves that companies are holding onto are bigger than ever," Parshley said. "Their profits are record-breaking and homeowner's prices are not dropping overall. This does not point to signs of a market in distress."

According to TDI, insurers paid $8.75 billion in claims last year while collecting just under $20 billion in premiums.

During the last legislative session, lawmakers criticized TDI for not collecting more data on how insurers operate.

In 2025, the federal government published a report looking at the impact of climate change on home insurance, which included an analysis of where homeowners were being dropped by insurers. But because the state agency declined to request that information from insurance providers, the national map included in the report left Texas blank.

"This is a pretty damning map," said state Sen. Charles Schwartner, a Georgetown Republican, during a hearing last session. "The black hole of Texas here, regarding information that can be gleaned from TDI."

TDI is now collecting that information -- after lawmakers passed a law requiring them to -- and will publish a report later this year looking at insurance availability by ZIP code, Crawford said.