Rising home prices, severe weather and rising inflation have caused home insurance premiums to skyrocket in Texas and elsewhere.
According to an analysis by online lending platform LendingTree, home insurance rates in Texas rose 54.5% from 2019 to March 2024. Only Arizona, Nebraska, Illinois and Utah had larger cumulative increases over that period.
Texas’ increase outpaced the national average. U.S. home insurance rates rose 37.8% during the same period, the report said.
The average annual home insurance premium in Texas for 2024 is $4,647, the fourth highest rate in the country and about 88% higher than the national average. The average annual home insurance premium in the U.S. is $2,478.
LendingTree analyzed home insurance data from Quadrant Information Services. The policy covers $350,000 in home insurance. Home insurance rate change data was compiled using RateWatch from S&P Global.
LendingTree reports that most of the interest rate increases are due to rising home prices: The cost of building materials remains higher than in 2019, and needed repairs are also more expensive.
The median home price in the Dallas-Fort Worth metropolitan area is expected to be $405,000 in April 2024, up 1.5% from a year ago, according to data from the Metrotex Association of Realtors.
Climate change is also putting more homes at risk from extreme weather, and many insurers are raising premiums in risky areas to combat rising claims, according to the LendingTree report.
High winds and hail accounted for the most insurance claims (42.6%) nationwide from 2017 to 2021. The average loss was $12,913, according to the report. Multi-billion-dollar events involving hail and tornadoes caused the highest estimated damages in 2023, according to a separate study by LendingTree.
Texas had 16 confirmed weather events last year that cost more than $1 billion in damages, 15 of which were severe storms, according to data from the National Centers for Environmental Information.
“Texas ranks in the top five for just about every peril you can think of: hurricanes, hail, wind, flooding, lightning and tornadoes,” said Rich Johnson, director of public affairs for the Insurance Association of Texas.
Johnson said despite concerns about severe weather, no insurers will refuse to offer insurance in Texas, as some insurers in other states have done. More insurers will do business in Texas in 2023 and 2024 than in 2022, Johnson said.
“I think it’s a business-friendly environment,” he said. “Companies can do business here. They can get the proper valuation. There’s all the risks and dangers here, but companies can still do business.”
