Texans spend more on homeowners insurance than almost any other state

When Texas tops a list, it’s usually something we want to be proud of. However, recent data from NerdWallet shows that Texas is second only to Oklahoma for the most expensive homeowner’s insurance policies in the United States.

NerdWallet analyzed price data from more than 100 insurance companies and found that, on average, Texans pay a whopping $4,400 a year for their homeowners insurance policies. That’s second only to Oklahomans, who pay $5,495 a year. According to their report, the national average for homeowners insurance is $1,915 per year, or about $160 per month.

Of course, homeowners insurance policies have many variables that can drive up costs. Your policy will depend on where your house is located, the size of your home and the amount of coverage your property requires. But when you crunch the numbers, Texans pay a hefty sum to insure their homes.

Why Is Texas Homeowners Insurance So Expensive?

According to a report by Texas Tribunethe worsening effects of climate change have a lot to do with it.

“Texas is vulnerable to hurricanes and floods, both of which are exacerbated by climate change,” the report states. “Insurers are now increasingly concerned about more powerful thunderstorms that destroy homes with flooding, hail and strong winds, analysts and experts said.”

Homeowners insurance costs can vary greatly from city to city. NerdWallets’ numbers show that Houstonians are paying exorbitant amounts for their policies. The average Houston homeowner will pay $6,600 a year for their homeowners policy, while Fort Worth policies average about $5,335 and Dallas policies reach $5,045. Compare those numbers to the Texas Hill Country metro areas of San Antonio ($3,590 per year) and Austin ($2,840).

Houston’s high concentration of flood-prone areas and its susceptibility to hurricanes are the obvious culprits homeowners can blame for skyrocketing insurance costs. In North Texas, high winds, hail and tornadoes are reason enough for high homeowner insurance costs.

But even when accounting for storms and natural disasters, TribuneThe report showed that homeowner’s insurance policies in Texas increased in price at twice the rate of the rest of the nation. Compare NerdWallet’s numbers to Texas Department of Insurance data, which shows the average Texas homeowner paid about $2,124 a year in 2021. That’s a 205 percent increase over three years.

How to save on homeowners insurance

While you may not be able to change some of the variables in your homeowners insurance policy, here are some tactics you can use to save money:

1. I’m shopping: Don’t settle for the first offer you get. Different insurance companies offer different rates and discounts. Compare quotes from multiple providers to make sure you’re getting the best deal.
2. Package Rules: Many insurance companies offer discounts if you combine your homeowners insurance with other policies such as auto insurance or life insurance. Consolidating your policies with one insurer can result in significant savings.
3. Increase deductibles: By choosing a higher deductible, you can lower your premiums. Just make sure you have enough savings to cover the deductible in case you need to file a claim.
4. Improve home security: Installing security systems, smoke detectors, deadbolts and other safety features can reduce the risk of burglary or damage, resulting in lower premiums. Some insurers offer discounts for these safety measures.
5. Maintain a good credit score: Insurance companies often use credit scores to determine premiums. Maintaining a good credit score can help you qualify for lower rates. Pay bills on time, keep credit card balances low and avoid opening unnecessary new accounts.
6. Update and renovate your home: Upgrading your home’s electrical, plumbing and heating systems can reduce the risk of accidents or damage, potentially lowering your premiums. Renovations that make your home more resilient to natural disasters, such as strengthening your roof or installing storm shutters, can also lead to rebates.
7. Review coverage regularly: Periodically review your policy to make sure you’re not paying for more coverage than you need. If you’ve made significant upgrades to your home or downsized your belongings, adjust your coverage accordingly to avoid overpaying.
8. Maintain a claim-free history: Avoid making small claims if possible as frequent claims can lead to higher premiums. Keep your major loss insurance and handle minor repairs or damage out of pocket.
9. Consider the location: The location of your home can affect your insurance premiums. Homes in areas exposed to natural disasters or high crime tend to have higher premiums. Before buying a home, research the insurance costs associated with the area.
10. Ask about discounts: Ask your insurance provider about available discounts. They may offer discounts if you are a long-term customer or part of certain professional associations. Don’t hesitate to ask about possible savings opportunities.