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Texas homeowners insurance

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Here we outline what you need to know to make smart choices when buying Texas homeowners insurance, including a comparison of rates for homeowners insurance companies in The Lone Star State and recommendations on how much coverage you need.

No matter where you live, it pays to compare rates for homeowners insurance. The same is true for Texas. Premiums can vary, sometimes by a little, sometimes by a good amount more.

Why is that? Michael Barry, a spokesman for the Insurance Information Institute, a trade group, explains that various factors influence home insurance rates. They can include building costs in your area, local crime rates, and the risk where you live from natural disasters such as hurricanes, hail storms and tornadoes. And, of course, insurance companies want your business and that may affect pricing.

Here we will provide information on:

  • Homeowners insurance: Texas average cost
  • How deductibles affect your insurance rate
  • Texas homeowners insurance comparison: Rates for 10 coverage levels
  • Texas home insurance comparison by ZIP code
  • Texas home insurance rates by company
  • Best Texas home insurance companies
  • Texas home insurance discounts
  • Other types of home insurance you may need in Texas
  • Methodology

Homeowners insurance: Texas average cost

The average cost of home insurance in Texas is $3,429, making Texas the fifth most expensive state in the country for home insurance. Its average cost is $1,124, or 49%, more than the national average of $2,305, for the coverage level of:

  • $300,000 dwelling coverage
  • $1,000 deductible
  • $300,000 liability

Among key things to consider when buying a homeowner insurance policy, you decide the coverage amount for the following:

  • dwelling
  • liability
  • medical payments

The limits of your coverage for the following are typically a set percentage of your dwelling coverage limit as shown below:

  • other structures – 10%
  • personal property – 50%
  • loss of use – 20%

 

Texas homeowners insurance comparison by ZIP code

ZIP code 77455 in Louise is among the most expensive places to insure a home in Texas, topping out at an average of about $5,900. That’s over $4,760 more than the cheapest neighborhoods in the state for home insurance, which are in Anahuac. Insurance.com analyzed home insurance rates from major insurance companies in nearly every ZIP code in Texas. 

For $300,000 dwelling coverage with a $1,000 deductible and $300,000 liability limits, the average rate of $5,911 for ZIP code 77455 is the highest for the Lone Star state. ZIP codes for Anahuac, Angleton and Clute, with rates ranging from $1,148 to $1,239, are among the cheapest Texas home insurance rates by ZIP code.

By entering your ZIP code in the search box, you’ll see the average home insurance rate for that area, as well as the highest and lowest premium fielded from major insurers. This will give you an idea of how much you can save by comparing home insurance rates. For example, the highest rate ($6,560) for Houston ZIP 77504 is $1,355 more than the lowest ($5,205). That means you can save nearly $1,400 just by comparing rates and shopping around. Rates are for coverage of $300,000 with a $1,000 deductible and $300,000 liability limits.

Average home insurance rates for largest cities in Texas

Here are average rates for some of the state's largest cities, for a policy with $300,000 dwelling coverage, a $1,000 deductible and $300,000 in liability protection:

Houston -- $4,363

San Antonio -- $2,944

Dallas -- $3,876

Austin -- $2,862

Fort Worth -- $3,739

El Paso -- $2,361

Arlington -- $3,953

How deductibles affect your insurance rate

A deductible is the amount of money you pay before your insurance company pays out on a claim. For example, if your home sustains damage of $3,000 and you have a $500 deductible, you pay the first $500 and your insurer pays $2,500.

Some deductibles are based on dollar amounts. Others are based on a percentage of your home's value. If your home is insured for $200,000 and your deductible is 2%, you will owe $4,000 before insurance coverage kicks in.

You choose a home insurance deductible amount, which applies to claims for damage to your home or belongings, but not if you’re sued or a medical claim is filed by someone injured in your home. These are typically in the amounts of $500, $1,000, $1,500, $2,000 and $2,500.

Understanding the implications of the deductible you choose when buying homeowners insurance is important - in Texas, as in all the states, a higher deductible means the more you'll save on insurance premiums.

The savings can be significant. Barry says that most insurers recommend a deductible of at least $500, which may be ok for you. But keep in mind that by raising that to $1,000, you're likely to save as much as 25% on your policy, according to the III. Of course, that's $1,000 out of your pocket if there are major problems, so it's a bit of a balancing act.

Dwelling coverage, liability and medical payments limits

When buying home insurance, you should insure your home based on its replacement cost, which is the amount you need to rebuild it if damaged or destroyed, and not its market value, which is what you could sell your home for in its current condition. Replacement cost offers more protection because the cost of building a home often exceeds its market value.

When shopping for a policy, you will have to choose a “dwelling coverage” amount. You should select a dwelling coverage limit that best matches the cost to repair damage to your home or rebuild it completely at equal quality — at current prices. This can be an arduous task, so using online calculators or hiring an appraiser to give you a replacement cost valuation will save you time.

Liability insurance applies to incidents in which you’re at fault and the result is that a guest in your home or on your property is injured. It covers medical expenses, as well as damage caused to neighbors’ property. Personal liability also covers legal fees if you are sued, as well as any resulting judgments from a lawsuit, up to your policy limits.

Most home insurance policies come with $100,000 in personal liability insurance but this is rarely enough coverage. The cost to defend a lawsuit or to pay for medical expenses for a serious injury can easily exceed that amount. Most experts recommend upping your limits to at least $300,000.

Medical payments also pays for injuries to guests in your home but differs from liability in that it applies to injuries regardless of who is at fault. It is for minor incidents as it comes with much lower coverage limits than liability insurance. Medical payments coverage is typically for $1,000 or $5,000.

Texas homeowners insurance comparison: Rates for 10 coverage levels

Here we show the average cost of Texas homeowners insurance for 10 coverage levels, based on a rate analysis by Insurance.com. 

Enter a dwelling coverage of $200,000, $300,000, $400,000, $500,000 or $600,000. You will see annual average rates based on a $1,000 deductible for each liability limit of $100,000, $300,000.

Coverage level Average annual rate
$200,000 with $1,000 Deductible and $100,000 Liability$2,923
$200,000 with $1,000 Deductible and $300,000 Liability$2,940
$300,000 with $1,000 Deductible and $100,000 Liability$3,412
$300,000 with $1,000 Deductible and $300,000 Liability$3.429
$400,000 with $,1000 Deductible and $100,000 Liability$3,642
$400,000 with $1,000 Deductible and $300,000 Liability$3,648
$500,000 with $1,000 Deductible and $100,000 Liability$4,024
$500,000 with $1,000 Deductible and $300,000 Liability$4,040
$600,000 with $1,000 Deductible and $100,000 Liability$4,267
$600,000 with $1,000 Deductible and $300,000 Liability$4,275

 

Texas home insurance rates by company

Because costs are not uniform, it's crucial to shop around for the best home insurance rate.

Many factors influence the price you pay for insurance. Among others, the III cites the following:

  • Your home's square footage
  • Building costs in your area, and your own home's construction, materials and features
  • Local crime rates
  • The likelihood of certain types of disasters, such as hurricanes

So, shop around for the right policy. III suggests getting at least three price quotes when shopping for coverage, and says that doing so can save you up to hundreds of dollars annually.

Although Texas home insurance costs can be expensive, it's a mistake to cut corners in an attempt to save. III recommends that you get enough insurance to cover the costs to:

  • Repair or replace the structure of your home and personal possessions
  • Defend yourself against liability costs if someone is hurt on your property
  • Pay for a temporary place to live while your home is repaired or replaced

Here are home insurance rates by company for six coverage sets. Based on our rate analysis, you’ll see Farmers Insurance Exchange and USAA were among the cheapest home insurance companies in Texas. 

 

Company$200,000 dwelling/$1,000 deductible/$100,000 liability
Texas Farmers$2,422
Farmers Insurance Exchange$2,425
Nationwide General Insurance$2,555
USAA$2,654
Travelers$2,763
Allstate Vehicle Property$2,952
Safeco$2,988
Nationwide Property Casualty$3,070
Nationwide Mutual Insurance$3,170
Allstate Fire Casualty$3,324
State Farm$3,569
Foremost$3,757

Company$200,000 dwelling/$1,000 deductible/$300,000 liability
Texas Farmers$2,435
Farmers Insurance Exchange$2,437
Nationwide General Insurance$2,576
USAA$2,654
Travelers$2,790
Allstate Vehicle Property$2,976
Safeco$2,996
Nationwide Property Casualty$3,084
Nationwide Mutual Insurance$3,180
Allstate Fire Casualty$3,348
State Farm$3,579
Foremost$3,774

Company$300,000 dwelling/$1,000 deductible/$300,000 liability
Texas Farmers$2,690
Safeco$3,023
Farmers Insurance Exchange$3,045
Nationwide General Insurance$3,233
Travelers$3,305
USAA$3,325
Allstate Vehicle Property$3,496
State Farm$3,805
Nationwide Mutual Insurance$3,848
Nationwide Property Casualty$3,938
Foremost$3,995
Allstate Fire Casualty$4,042

Company$400,000 dwelling/$1,000 deductible/$300,000 liability
Safeco$2,653
Texas Farmers$2,806
Travelers$3,348
Nationwide General Insurance$3,469
Farmers Insurance Exchange$3,597
Allstate Vehicle Property$3,653
USAA$3,798
Nationwide Property Casualty$3,979
Nationwide Mutual Insurance$4,020
State Farm$4,037

Company$500,000 dwelling/$1,000 deductible/$300,000 liability
Texas Farmers$2,838
Safeco$3,070
Travelers$3,345
Allstate Vehicle Property$3,712
Nationwide General Insurance$3,769
State Farm$4,062
USAA$4,157
Farmers Insurance Exchange$4,164
Nationwide Mutual Insurance$4,168
Nationwide Property Casualty$4,318

Company$600,000 dwelling/$1,000 deductible/$300,000 liability
Texas Farmers$2,779
Safeco$3,404
Travelers$3,655
Allstate Vehicle Property$3,990
Nationwide General Insurance$4,044
Farmers Insurance Exchange$4,290
USAA$4,370
Nationwide Mutual Insurance$4,417
Nationwide Property Casualty$4,456

Best Texas home insurance companies

The homeowners insurance company with the cheapest rates isn’t necessarily the best. Other factors to consider are customer service and claims processing. Insure.com’s 2020 Best Home Insurance Companies report ranks major insurers on feedback from 3,700 customers. They are asked about the value for the price, customer service, claims service and if they’d recommend the company.

Here are how home insurance companies in Texas ranked on the survey. Scores are out of 100. 

CompanyScore
Erie92.24
Esurance89.4
Nationwide88.4
Chubb87.6
AIG87.3
USAA87
Safeco86.5
American85.7
Progressive84.7
Travelers83.9
Allstate83.6
State Farm83.4
Liberty Mutual82.3
Hartford81.6
Farmers79.7

Texas home insurance discounts

There are several ways to reduce your Texas home insurance costs. Many insurers will lower your bill if you purchase more than one type of insurance policy from them. This process – known as "bundling" – can cut your costs by up to 15%, III says.

You can also cut your costs by making your home more disaster-resistant. Installing hurricane glass or accordion shutters might net you a discount.

According to III, other possible home insurance discounts include:

  • Installing smoke detectors, a burglar alarm or dead-bolt locks -- 5% each
  • Installing a sprinkler system, and a fire and burglar alarm -- 15% to 20% percent
  • Loyalty discounts -- up to 5% after three to five years, and 10% for six years or more

Texas homes underwater by county

When a home is underwater it means the homeowner owes more on the mortgage than the home is worth in the current market. For example, if the principal balance on your mortgage is $250,000 but the fair market value of the home is $200,000, your home is underwater. In other words, you could not sell the home and make enough from the sale to pay off your mortgage.

According to Insurance.com’s 2020 analysis of second quarter data in Texas, the counties of Coryell, Cameron and Val Verde have the highest percentage of underwater homes in the state. Tarrant, Dallas and Ector have the lowest percentage of underwater homes.

County% of Underwater% with Equity
Coryell15.1%15.5%
Cameron14.8%23.0%
Val Verde12.0%21.6%
Polk11.5%26.8%
Wichita11.1%19.1%
Van Zandt11.1%32.7%
Henderson11.0%27.5%
Llano10.6%30.5%
Medina10.4%31.7%
Cass10.2%30.4%
Kleberg10.1%21.1%
Hutchinson10.1%19.7%
Rusk10.0%26.2%
Webb9.8%23.7%
Hale9.6%21.6%
Tom Green9.5%26.9%
Lamar9.4%34.6%
Navarro9.3%33.3%
Maverick9.3%33.8%
Burnet9.2%32.3%
Wilson9.2%32.5%
Angelina9.1%26.2%
Hill9.1%33.7%
Aransas9.0%28.6%
Waller9.0%22.7%
Anderson9.0%22.5%
Wood9.0%29.3%
Titus9.0%26.4%
Cherokee8.7%30.6%
Bastrop8.5%31.3%
Victoria8.5%26.3%
Bowie8.4%19.4%
Hopkins8.1%36.0%
Nacogdoches7.9%23.7%
Palo Pinto7.8%30.4%
Walker7.7%28.3%
Wharton7.6%29.9%
Kerr7.5%26.9%
Cooke7.5%32.8%
Erath7.3%29.2%
Austin7.3%32.6%
Harrison7.1%21.7%
Matagorda6.9%32.1%
Howard6.9%35.9%
Washington6.8%29.2%
Caldwell6.7%44.9%
Fannin6.4%37.6%
Hunt6.1%34.2%
Gregg6.0%20.4%
Brown6.0%28.1%
Hardin5.9%23.5%
Atascosa5.8%24.9%
Smith5.7%22.0%
Randall5.6%16.5%
Orange5.3%32.0%
Lubbock4.9%17.1%
Kendall4.8%22.4%
Liberty4.8%34.2%
Mclennan4.8%33.3%
Hidalgo4.8%28.4%
El Paso4.8%21.6%
Potter4.7%27.0%
Hood4.6%27.6%
Jefferson4.5%29.7%
Grayson4.4%34.1%
San Patricio4.2%28.3%
Comal4.0%24.7%
Brazos3.9%21.9%
Taylor3.9%21.4%
Parker3.5%28.2%
Nueces3.4%29.0%
Wise3.4%28.7%
Montgomery3.4%25.4%
Kaufman3.2%23.7%
Fort Bend3.1%22.2%
Johnson3.1%30.3%
Guadalupe3.0%19.3%
Galveston2.9%28.1%
Bell2.9%12.3%
Hays2.8%27.1%
Williamson2.7%27.9%
Collin2.7%31.4%
Harris2.5%32.3%
Ellis2.4%29.6%
Brazoria2.4%27.1%
Denton2.4%31.5%
Bexar2.4%32.5%
Rockwall2.4%22.0%
Midland2.3%30.4%
Travis2.3%43.5%
Tarrant2.3%40.1%
Dallas2.1%46.1%
Ector2.0%24.8%

Texas home insurance FAQs

Do I need windstorm and hail insurance?

You'll have to take special steps to get protection from windstorm (including hurricanes) and hail damage if you live in any of Texas' 14 coastal counties or parts of Harris County on the Galveston bay. The specific counties are Aransas, Brazoria, Calhoun, Cameron, Chambers, Galveston, Jefferson, Kennedy, Kleberg, Matagorda, Nueces, Refugio, San Patricio and Willacy.

The Texas Windstorm Insurance Association (TWIA) is a state-sponsored group that serves as the insurer of "last resort" for these areas. According to the TWIA, the coverage it provides is "similar to for-profit insurance companies in that it gives homeowners a written contract that details the coverage and restrictions of their insurance policy; policyholders make premium payments and TWIA pays claims."

If you're seeking TWIA coverage, the TDI recommends contacting a licensed insurance agent who can provide guidance. To be eligible, you have to meet certain criteria beyond location, including:

  • You must have been denied coverage by at least one insurer in the private market.
  • Properties must be certified by the TDI or TWIA as having been built to building codes.
  • If the home is in a designated flood zone, proof of insurance through the National Flood Insurance Program (NFIP) must be provided.

Do keep in mind that you can't buy TWIA insurance just before a hurricane threatens your home. The TWIA is specific: "When a hurricane enters the Gulf of Mexico (at 80 degrees longitude and 20 degrees latitude), you may no longer change or buy windstorm coverage."

The average cost for this coverage is about $1,500 per year, according to the TWIA, which adds that individual premiums will vary and are based on the characteristics of each policy. For more information, call 1-855-352-6278.

What is a hurricane deductible?

There are separate deductibles for protection from hurricanes and wind/hail damage in Texas, whether you buy it from a regular insurer or the TWIA. The III and TDI note that, typically, these deductibles range from one to five percent of your home's insured value.

How do I buy flood insurance?

The National Flood Insurance Program (NFIP) was created to provide property owners with flood insurance that is typically not covered under standard policies. Texas homeowners who live in flood-prone areas, like coastal communities, may need to buy this protection, which they can get through most standard insurance companies.

The TDI points out that this coverage comes with a deductible, usually ranging from $1,000 to $10,000 once a claim is made.

Something important to know: You can't purchase flood insurance after learning that a hurricane or tropical storm is approaching. Coverage becomes effective 30 days after purchase, so the NFIP recommends that you consider where you live and the risks living there, and plan ahead.

For more information, visit https://www.floodsmart.gov/floodsmart.

Do I need earthquake insurance?

The TDI notes that most polices do not cover damage from earthquakes. But it adds that most insurers offer policy endorsements to cover such damages.

The TDI says these additions tend to be fairly cheap because earthquakes are rare in the state. Trusted Choice, a trade group representing independent insurance agents in Texas, points out that there is no average rate for the coverage, which will be affected by the home's value and location.

What types of extra coverages or endorsements should I consider?

In Texas, as elsewhere, you can buy additional coverage that's not specified on your policy. But these attachments will raise your premiums.

The III says the more typical endorsements raise coverage on your most valuable items, such as fine art and jewelry. Cameras and other expensive equipment can also be protected. Here are several other endorsements you can buy for added protection, according to the TDI:

  • Backup of sewers or drains.
  • Damage to foundation or slabs.
  • Extended or additional dwelling replacement coverage, which pays up to a determined amount if your basic policy doesn't pay enough to rebuild your home.
  • Law or ordinance coverage, which provides protection when repair costs are higher because of local building codes or ordinances.
  • Mold remediation, which covers mold damage.
  • Replacement cost-dwelling, which pays replacement cost once you fix or replace your property.
  • Replacement cost-personal property, which pays replacement costs after you repair or replace your property.
  • Water damage from a plumbing, heating, or air conditioning system. The TDI says this covers "sudden and accidental" water damage. But the TDI notes that most insurers won't provide coverage for "continuous and repeated" water damage.

What if I have trouble getting home insurance?

The Fair Access to Insurance Requirements (FAIR) Plan is a state-mandated program that can provide insurance for individuals who are having trouble protecting their property because insurers consider them high risk. In Texas, the Texas Fair Plan Association (TFPA) provides homeowners insurance when no one else will.

To qualify, homeowners much meet certain conditions.

  • Applicants must have been denied coverage by at least two insurance companies licensed to write, and are actually writing, homeowner policies in Texas.
  • Homeowners are not eligible if they already have a policy or have been given a renewal offer from a Texas-licensed insurer.
  • A qualified policyholder must reapply for coverage in the open market every two years.

The TFPA does not sell policies directly to the public and does not have agents of its own; you can only apply to the TFPA through a licensed agent.

Surplus lines carriers

For the very last last-resort, when you can't find homeowners insurance even through the TPFA, the TDI says you could consider Surplus lines carriers.

"Surplus lines carriers are out-of-state companies not licensed in Texas, but legally eligible to sell insurance to insure risks that companies in the standard market are unwilling to insure," the TDI explains. "Surplus lines carriers usually charge more than licensed companies and offer less coverage."

The TDI adds that, since these carriers aren't members of a guaranty association, your claims might go unpaid if the surplus lines carrier becomes insolvent and unable to cover claims.

Regular insurance agents must make a good effort to find coverage with a licensed company before offering you a surplus lines policy. "Ask which licensed companies turned you down, and why," the TDI advises. "Companies must tell you why they turned you down."

Can my insurance company cancel or not renew my insurance?

An insurer cannot cancel a homeowners policy after 60 days of purchase "unless there is (evidence of) fraud, increased risk or nonpayment of premium," according to the TDI. "An insurer is required to provide 10 days notice before a cancellation. If you paid premiums in advance, they must be returned to you.

As for nonrenewal, a company must give you at least 30 days written notice before your policy's expiration. If the company fails to notify you, it must renew the policy if you want it to.

There are several reasons why an insurer may decide not to renew, including that the property has fallen into disrepair; it may require you to make repairs before renewal. Also, the TDI says nonrenewal can occur if you've filed three or more non-weather claims within three years or you file a claim for a loss not covered in your policy.

Final advice from the TDI and III: be sure to go over the specifics of policy cancellations and nonrenwal, as well as all elements of the policy, with an agent before securing homeowners insurance in Texas.

 

Methodology:

Insurance.com in 2020 commissioned Quadrant Information Systems to field home insurance rates from major insurers in each state for nearly all ZIP codes in the country for 10 coverage levels based on various dwelling and deductible limits. The homeowner profile is a 35-year-old married applicant with excellent insurance score; new business HO3 policy for house built in 2000 with frame construction and composition roof. Other Structures: 10%. Loss of Use defaulted: 10%. Personal Property defaulted: 50%. Guest Medical limit: $5,000. Personal property: 50% of dwelling coverage for actual cash value.