Homeowners Insurance in Texas

What factors influence my home insurance rate?

The cost of homeowners insurance in Texas can vary based on several factors. Here are a few common elements that insurance providers use to evaluate risk and determine your house insurance cost in Texas:

• Credit score: If you have a low credit score, your premiums will likely be higher because insurers may see you as a higher risk.
• Claims history: If you have filed a claim in the last three to five years, your Texas homeowners insurance may cost more.
• Home's loss history: If the previous homeowner made a claim in the last three years, it could affect your coverage cost.
• Location: Living in an area prone to damage – like near the Texas coast – can lead to higher premiums and possibly require special coverage.
• Deductible: Choosing a higher deductible means paying more out-of-pocket for damages, but your premiums will be lower. A lower deductible means higher premiums.
• Home renovations: Upgrading your home, such as adding more space or using expensive materials, can increase your premiums.
• Liabilities: Having features like pools or trampolines, which can be risky, may lead to higher premiums since you're liable for anyone using them – even without your permission.
• House's age: Older homes usually cost more to insure. In Texas, on average, homes are about 27 years old, and newer homes often qualify for discounts.
• Home-based business: Running a business from home may increase your premium to cover inventory, equipment, and supplies.
• Coverage: The type and amount of coverage you choose, including personal property and liability protection, also impact your insurance cost.

Common insurance discounts in Texas

Unlike most other states, homeowners insurance quotes in Texas are increasingly higher. Want to lower your home insurance cost in Texas? 

Although there are several ways to save on house insurance, one of the most effective ones is to get discounts. If necessary, ask your insurance provider whether you get every discount you qualify for.  

Here are some discounts that Texas homeowners commonly get:

• Advanced quote: If you switch companies before your current policy ends, you may qualify for an early shopper discount.
• Multi-policy discount (Bundling): You can often get a discount if you buy more than one type of insurance from a similar company. Common bundle discounts include home and auto insurance, but you can also bundle home insurance with life, RV, motorcycle, and other types of insurance.
• Home security: If your home has active, monitored security systems such as smoke detectors, fire alarms, fire extinguishers, burglar alarms, water shut-off devices, or deadbolts on exterior doors, you may qualify for a home security discount.
• Claim-free: If you haven't filed a property insurance claim in the past, you may be eligible for a discount. Some insurance providers require you to be claim-free for three to five years to qualify.
• New/Renovated home discount: New or renovated homes often qualify for discounts because upgraded systems, such as plumbing and wiring, are less likely to fail.
• Roof discount: Homes with roofs made from materials that prevent damage, resist fire, or have newer roofs may qualify for a discount.
• Umbrella package discount: Texas homeowners may get a special discount if they purchase umbrella insurance.
• Seniors or retirees: Some companies offer a discount if you're over 55, retired, or a senior working part-time (less than 24 hours a week). Remember, the house must be your primary residence to qualify.

Tips for lowering home insurance rates

Every year, many homeowners look for ways to get better rates or discounts on their home insurance without losing important coverage. 

In Texas, where unique risks and challenges exist, certain strategies can help you save on home insurance renewals. 

Here's a list of actionable steps to lower your homeowners insurance cost in Texas.

Shop around

Before you renew or buy a new policy, it's best to collect Texas home insurance quotes from several providers. Compare quotes to find the coverage you need at a price you can afford.

Bundle your policies

If you buy your home and auto insurance from the same company, you may qualify for a 5% to 15% discount. 

Just ensure that the combined cost is cheaper than buying the policies separately from different companies.

Increase your deductibles

A higher deductible typically means lower premiums. According to the Insurance Information Institute, raising your deductible from $500 to $1,000 can help save you up to 25% on your premiums. 

However, it also means you'll pay more out of pocket if you need to file a claim.

Lower your coverage limits

Reducing your coverage limits can also lower your premiums. But, like with higher deductibles, lower limits could mean paying more out of pocket if you need to make a claim.

Ask about discounts

Check with your insurer about discounts for security systems, storm shutters, or being a long-term policyholder. Discounts are often available but aren't automatically applied to your policy.

Avoid filing small claims

It can be tempting to file a claim for minor damages, but you may save money in the long run by paying for small expenses out of pocket. Some insurers even provide discounts if you go a few years without filing a claim.

Review your coverage

Make sure you aren't over-insured. If the value of your belongings has gone down or you've made home improvements, adjust your coverage to reflect these changes.

What does Texas home insurance cover?

Homeowners insurance helps protect your home, belongings, and even individuals who may get hurt on your property. 

Here's a breakdown of what a typical homeowners insurance policy in Texas covers.

Dwelling coverage

This coverage is the main part of your home insurance. It helps cover the cost of repairing, replacing, or rebuilding your home if it's damaged by a covered peril such as fire, vandalism, theft, or weather events like lightning, wind, or hail. However, you'll need separate insurance for earthquakes or floods.

Personal property coverage

This covers your personal belongings inside your home, such as heating or cooling systems, furniture, kitchen appliances, clothing, and other items. 

You may need an insurance rider or additional endorsement if you have valuable items like artwork or jewelry. 

Other structures

This policy helps cover buildings on your property that aren't attached to your home, such as a garage, shed, or barn. It also includes outdoor items such as grills, fireplaces, swing sets, walls, and fences. 

If you have a trampoline, swimming pool, or other recreational equipment, they may require additional liability coverage due to their higher risk.

Personal liability coverage

This helps protect you if someone gets injured on your property. If they sue you, your insurance policy can help cover your legal fees and expenses. 

In addition, the personal liability coverage also pays for medical expenses, such as ambulance rides, X-rays, and hospital stays.

Loss of use

If you can't live in your home because it's being repaired or rebuilt, this coverage helps pay for living expenses, including hotel stays, restaurant meals, and parking. 

These policies usually have limits on how much they'll pay and for how long, so it's important to know the details of your coverage.

Additional Texas insurance coverage options

In addition to standard home insurance, Texas homeowners should also consider additional endorsements or separate policies to get more coverage.

Here are some additional coverage options Texans must consider:

• Earthquake insurance: If you live in an area prone to earthquakes, you may need this coverage. It helps pay for rebuilding your house or replacing your belongings after an earthquake.
• Flood insurance: This is separate from your standard homeowners insurance policy and covers damage from flooding. You can get it through the National Flood Insurance Program or private insurers.
• Umbrella policy: An umbrella policy offers extra protection for your assets if you exceed the personal liability limits on your home insurance.
• Wind/Hail coverage: If you live near the coast or in a windy area, your insurance policy may not cover wind damage. The Texas Windstorm Insurance Association (TWIA) can provide coverage in such cases.
• Sewer/Water backup: This covers damage if a sewer line, sump pump, or drain causes water damage in your house.

What coverage is recommended in Texas

In Texas – due to its varied weather and natural disaster risks – it's suggested for homeowners to have the following insurance coverage policies:

Flood insurance

Floods are common in Texas, especially between April and September. Homeowners insurance usually doesn't cover flood damage, including flash floods. 

According to a Blue Ribbon Study, during a 14-year period (1986-2000), Texas had 4,722 flash floods. The study also showed that out of eight million buildings in flood-prone areas, three million didn't have flood insurance, leading to millions and billions of crop and property damage. This is why flood insurance is highly recommended. Even if you're not in a designated flood zone, floods can still happen.

Windstorm insurance

Windstorm insurance helps cover damage from strong winds, such as hurricanes or tornadoes. 

It can cover structural damage, loss of personal items, rebuilding costs, and living expenses if you have to leave your home. You can get this coverage as a separate policy or add-on.  

Scheduled personal property

Scheduled personal property coverage protects valuable items that exceed the limits of your standard policy. It includes jewelry, watches, computers, and collectibles. To get this coverage, the insurance provider may require you to provide receipts or appraisals for the items.

Replacement cost coverage

This coverage helps you rebuild or replace your home and belongings without considering depreciation. It means you'll receive the full amount needed to replace your items or rebuild your home.

Insuring your home in Texas

Whether you have owned a home for years or are a first-time homeowner, you can easily purchase house insurance in Texas. 

Follow the steps to the T:

• Assess your needs: Determine the type and amount of coverage you need based on your home's value, location, and personal preferences.
• Get a quote: Look around and get home insurance quotes in Texas from multiple insurance companies to find the best coverage at the best price.
• Review and compare: Compare the policies. Check the coverage limits, deductibles, and any exclusions or additional coverages.
• Choose a policy: Select the policy that best meets your needs and budget. From actual cash value to replacement cost value, the options are many.
• Purchase and finalize: Complete the application process and review the policy details before finalizing your purchase.

Is Texas homeowners insurance required by law?

Homeowners insurance is not required by Texas state law. However, most mortgage lenders will require you to have insurance as a condition for the loan. 

Even without a mortgage, having home insurance is a smart decision to protect your investment and provide financial security in case of damage or loss.

Still have questions?

Want to learn more about homeowners insurance in Texas? Here are some frequently asked questions:

Why is homeowners insurance so high in Texas?

Home insurance in Texas is higher than the national average due to the state's high risk of natural disasters, such as hurricanes, tornadoes, and hailstorms. These risks often lead to more claims, which raises the overall insurance cost.

What happens if you don't have insurance in Texas?

If you don't have homeowners insurance in Texas and your home is damaged or destroyed, you'll have to cover all repair or replacement costs out of pocket. This can lead to significant financial hardship, especially in the case of major damage.

What is the most common homeowners policy found in Texas?

The most common homeowners policy in Texas is the HO-3 policy. This policy offers broad coverage for both the dwelling and personal property, protecting against a wide range of perils except those specifically excluded.

What is the average age of homeowners in Texas?

The average age of homeowners in Texas varies, but a significant portion of homeowners are in the 30-55 age bracket. This demographic often includes both first-time homebuyers and those upgrading to larger homes.

What is the average cost of homeowners insurance in Houston, TX?

The average cost of homeowners insurance in Houston is typically higher than the state average due to the city's exposure to hurricanes and other natural disasters. Houston homeowners can expect to pay up to $5,200 annually, though this can vary based on specific factors such as home value and coverage options.