The price of home insurance is skyrocketing in Texas. What can be done?

Many homeowners in Texas get their tax bills from local officials around this time of year. Property taxes in the Lone Star State are among the highest in the nation, but there's something else that's putting the dream of homeownership further and further out of reach for many Texans.

A new analysis by the Houston Chronicle finds home insurance in Texas among the most expensive in the country. And in every corner of the state, homeowners are struggling to keep their homes insured, paying more and more for less coverage.

Megan Kimble, the Texas political economy reporter for the Chronicle, said the Texas Department of Insurance reported home insurance rates rose 21% on average in 2023.

"That's double what they rose the year before that. So 2023 saw this huge spike. And largely that's driven by inflation," Kimble said.

"The cost of repairing a home has gone up, but also the increased severity and frequency of storms across the state. So climate change is making extreme weather more intense. More severe losses are happening everywhere, and insurance companies have to recoup those losses through the premiums they charge."

Kimble's reporting tracks a significant and steady rise in insurance rates starting around 2017, which is when Hurricane Harvey struck. Another huge spike occurred in 2022.

"That spike in 2022 is actually largely driven by the increase in price of reinsurance, which is the insurance that insurance companies buy to protect their own losses," Kimble said. "So globally, the price of reinsurance skyrocketed in 2022 and 2023, and that is again driven by climate change. Across the world, insurance companies are just paying out more on claims than they were a few years ago."

This rise in costs is occurring statewide, Kimble said.

"I've heard from lawmakers across the state who say we don't have a healthy insurance market anywhere in the state," she said. "Lubbock, Amarillo, they have seen their insurance premiums skyrocket because of hailstorms. So this is impacting homeowners across the state, not just on the coast."

Kimble also reports that one in six Texas homeowners opted not to pay for insurance last year — that's usually only an option for those who've already paid off their homes.

"It's hugely unprecedented," she said. "The number of uninsured homes is rising, and that means those homes are really vulnerable to extreme weather, that if they were to suffer a catastrophic loss, you know, they might not be able to rebuild."

The Texas Department of Insurance has power to deny rate increases, but Kimble said that of the nearly 22,000 rate filings that have been submitted since 2017, there have been zero outright rejections of rates.

"What they say is that they are talking to companies as they submit their rate filings, that they ask for questions or more information or object to something within the rate filing," she said. "But there have been zero denials in the last seven years."

Kimble said she expects the cost of home insurance to come up at the legislative session that starts in January.

"There have been, I think, six interim hearings over the last year looking at insurance across the state," she said. "And some of the key committees who would regulate insurance have said we need to do something next session."

As it stands, there are some ways to reduce costs as a homeowner.

"Some companies, like State Farm, offer incentives to homeowners who harden their homes by tying down their roof or making their roof more resilient to high wind or hail. But it's kind of hard as a consumer to know what companies offer discounts," Kimble said.

"Some states, like Alabama, actually require insurers to offer discounts to homeowners that upgrade their homes to what's called a fortified standard, which was developed by the insurance industry to make homes more resilient to wind and hail. And so lawmakers have looked at it and are talking about doing something similar here."