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The average annual homeowners insurance premium in Texas is $1,982, which is substantially above the national average of $1,272, according to the most recent data from the Insurance Information Institute.
Texas ranked first among all states in the variety and frequency of natural and manmade hazards it experiences, according to NASA. Flooding, fires, tornadoes, hurricanes, hail storms, sinkholes, erosion, and drought are among some of the plethoras of natural disasters present in the state. As a result, homeowners insurance tends to be quite costly.
Even though Texas homeowners insurance is expensive, having sufficient coverage is crucial. You can get the most coverage at the best price by shopping around and comparing coverages.
Is homeowners insurance required in Texas?
Homeowners insurance isn’t legally mandated in Texas, but if you have a mortgage on your home, your lender will most likely require you to purchase homeowners insurance.
In Texas, having more coverage is advised. Consider purchasing flood, earthquake, and even an additional dwelling fire policy to protect your investments from an array of natural disasters. You’ll also want to make sure your policy sufficiently covers you against wind and water damage.
The cheapest homeowners insurance in Texas
Several factors affect your homeowners insurance costs, for instance, your home’s age and credit score. The Insurance Information Institute recommends gathering quotes from three insurance companies to compare policies or using an online broker tool to compare multiple quotes at once.
According to the team at Goosehead, “while the TX insurance market isn’t in as much turmoil as states like Louisiana and Florida, we are seeing us enter a ‘hard market,’ characterized by higher premiums due to labor/material shortage and an increase in loss history due to recent natural disasters.”
Here are some of the cheapest homeowners insurance companies, based on nearly 3,528 policies in Texas with dwelling coverage between $240,000 and $260,000 in the past six months, according to Goosehead:
Homeowners insurance companyAverage annual ratesProgressive$1,157Bankers$1,225Homeowners of America$1,259Cypress$1,359National General $1,360Kemper Preferred$1,417NatGen Premier$1,473Nationwide$1,505Hippo$1,543Mercury$1,558Lemonade $1,644Allstate$1,657Travelers $1,757State Auto$1,797Safeco$1,807SageSure$1,857Encompass$1,937Tower Hill Specialty $1,949Berkshire Hathway Guard $2,110Wellington$2,226American Modern $2,583Velocity Risk $2,841Foremost $3,070
Best homeowners insurance in Texas based on customer satisfaction
The latest study from J.D. Power — a consumer research company that conducts consumer surveys — shows that a homeowners insurance company’s customer service and reputation are more important than price for homeowners.
Here’s how homeowners insurance companies ranked when consumers were asked about satisfaction overall:
Homeowners insurance companyJ.D. Power ranking out of 1,000 pointsUSAA*882Amica Mutual854Auto Club So California (AAA)840Erie Insurance835State Farm835Auto Club Group (AAA)834American Family Insurance831Auto-Owners Insurance831AIG830COUNTRY Financial830Allstate829CSAA (AAA)828ASI Progressive821Farmers813Nationwide812MetLife810Safeco810Liberty Mutual806Chubb801Travelers800The Hartford798Homesite779
*USAA is only for active military, veterans, and their families.
Source: J.D. Power’s 2021 home insurance satisfaction survey
Most popular homeowners insurance companies in Texas based on market share
Through S&P Global Market Intelligence, we gathered the market share of the following insurance companies in Texas. Market share refers to the total percentage of customers for each provider in Tex. State Farm has the largest share of financial assets in the state as of 2019.
CompanyMarket ShareState Farm19.81%Allstate13.64%USAA9.17%GEICO6.87%Auto Club4.36%Liberty Mutual4.11%Nationwide3.91%Farm Bureau3.77%Travelers3.45%Farmers3.32%Progressive3.23%American Family1.98%Metlife1.96%The Hartford1.68%Erie1.59%
Cheapest homeowners insurance for homes near fire departments in Texas
In Texas, over 700,000 properties are at a high to extreme risk of experiencing a wildfire event, according to a 2021 report from Verisk, an insurance risk data analytics company. Living near a fire station could mean lower premiums.
Insurance CompanyAverage Annual Premium Allstate$1,257Amica$3,148Farmers$652Homeowners of America$2,048
Source: Insurify
Cheapest homeowners insurance for homes with swimming pools in Texas
Swimming pools are considered “attractive nuisances” under “other structures” of your dwelling coverage. Having a swimming pool can increase your liability as a homeowner, increasing your premiums.
Here are some of the cheapest insurance providers in Texas for homes with pools:
Insurance CompanyAverage Annual Premium Amica$1,257ASI$1,642Bankers$1,066Nationwide$916
Cheapest homeowners insurance in Texas for homeowners with dogs
Homeowners who own dogs are considered to be a liability to insurers, especially if their dog falls under an aggressive breed. Here are some of the cheapest insurance companies for households with a dog.
Insurance CompanyAverage Annual Premium Farmers$484Texas Farm Bureau Insurance$722USAA$2,722State Farm$2,743Nationwide$4,698
Source: PolicyGenius
Cheapest homeowners insurance in Texas for homeowners with poor credit
Insurance companies use credit-based insurance to determine your likelihood of filing a claim. If you have a poor credit score, your premiums might be higher than someone who has good credit.
Here are some of the cheapest homeowners insurance companies for homeowners with poor credit scores.
Insurance CompanyAverage Annual Premium Farmers$1,026Texas Farm Bureau Insurance$1,072USAA$3,305State Farm$4,711Nationwide$5,734
Frequently Asked Questions — Florida homeowners insurance
Do I need additional fire insurance in Texas?
If you have homeowners insurance, you generally won’t need to purchase a separate policy for fire protection.
If you live in an area more susceptible to fire damage, Hippo insurance suggests that you consider purchasing more coverage in these scenarios:
If you have an older home: If your home is damaged due to a fire, building ordinance coverage will rebuild your home so it complies with new building codes. If your home is significantly renovated: Consider extended replacement cost coverage if your home has customized or rare features. This coverage will replace your damaged items with ones of similar value. High-value belongings: If you have expensive jewelry or electronics, consider purchasing a special property floater for extra personal property coverage. Worried about additional living expenses: Consider purchasing more loss of use coverage if you’re concerned about any temporary living expenses if you have to move out due to a fire.
Dwelling fire coverage is a standalone fire insurance policy for extra coverage. You may need dwelling fire coverage to supplement your primary insurance policy if you have secondary properties such as a vacation home. Check with your insurance provider to see if they offer a dwelling fire policy for your home.
Who gets the best homeowners insurance rates in Texas?
Because Texas is highly susceptible to a variety of natural disasters, those in lower-risk areas tend to have the best rates. Installing home security devices, having good credit, and staying claim-free are a few ways to lower your insurance premiums in Texas.
How do I shop for homeowners insurance rates in Texas?
It is important to do your due diligence to find an insurer you trust and purchase coverage that fits your needs. By shopping around, you get the right coverage at a competitively priced premium.
1. Don’t go for the cheapest policy
A homeowners insurance should protect you and cover your costs if you need to rebuild. However, choosing the cheapest coverage might mean you won’t have enough to cover a home-related loss entirely. Your home will probably be your largest expense and one of your main priorities after a loss, says Pannhausen. Aside from your dwelling and personal property, you also may take a financial hit if you lack liability protection and have to pay for someone else’s medical bills and your legal defense out-of-pocket.
2. Update your coverage annually
Due to factors like rising inflation, your replacement cost may not be the same today as last year. Ensure you are updating your coverage annually so that you won’t have any gaps in your insurance coverage.
3. Shop around annually
You don’t have to settle for one insurance company. You can choose a provider with better rates for your coverage every year. Most companies will allow you to cancel your policy even during your period term and will return unused premiums. Be aware of cancellation fees your insurance provider might require you to opt-out and notify your mortgage lender of your cancellation if applicable.
4. Get accurate replacement cost estimates
Many customers will choose their replacement cost based on the price they paid for their home, which may leave them underinsured. It is vital to get an accurate estimate of how much it would take to rebuild your home completely. Consider new and expensive features and be honest when discussing the improvements you made to your home, says Pannhausen.