Right behind Louisiana, Texas is the state with the second-most expensive homeowners insurance in the country—but why is the cost so high? The price of homeowners insurance depends on numerous factors, including your location and the age of your home. However, there are other factors that have caused a recent spike in insurance prices in states like Texas and Florida that you might not have considered before. Below, we give you the answers as to why the price of Texas homeowners insurance is so high. We also discuss where to find affordable homeowners insurance in Texas, as well as what you can do to decrease the cost.
What We'll Cover
- Why Is Homeowners Insurance in Texas Expensive?
- Natural Disasters Are Common in Texas
- Inflation Increases the Cost of Home Repairs
- Low Interest Rates Mean Higher Monthly Premiums
- How Much Does Homeowners Insurance in Texas Cost?
- Where Can I Find Affordable Homeowners Insurance in Texas?
- What Can I Do to Lower the Cost?
- Final Thoughts on Texas Homeowners Insurance
Why Is Homeowners Insurance in Texas Expensive?
There are many reasons as to why the cost of homeowners insurance is high in Texas, but we’ve narrowed it down to three key answers: the high likelihood of a natural disaster occurring, the effects of inflation, and low interest rates. The price of homeowners insurance is different for everybody, but these three answers are some of the main reasons that homeowners insurance in Texas is higher than the national average.
Natural Disasters Are Common in Texas
Texas has a lengthy coastal border and is located in tornado alley. Because of its geographic location and interesting climate patterns, Texas is prone to several natural disasters and inclement weather, such as hurricanes and tornadoes. Natural disasters automatically put your home and belongings in harm’s way, and because they are likely to occur in Texas, insurance providers must charge more money for homeowners insurance to be able to pay expensive claims for house damage caused by natural disasters.
Inflation Increases the Cost of Home Repairs
Another reason why Texas homeowners insurance is so high is inflation in the economy. Recently, the cost of lumber, copper and most raw materials has gone up. This has had a direct effect on the price of homeowners insurance. The inflation of those prices means the cost of repairing a home is also increasing. This means that insurance providers need to be able to pay pricey claims for policyholders with damage to their homes. Additionally, a decrease in real estate inventory has resulted in a spike in home prices.
Low Interest Rates Mean Higher Monthly Premiums
When interest rates are low, it means that insurance companies are getting a lower return in their risk-free investments. Insurance providers make a profit by collecting and investing the leftover money after all policyholders’ claims have been paid. However, when interest rates are low, insurance companies cannot rely on investing the float in order to make a return. Instead, insurance companies have to look for underwriting profits, which often means higher monthly premiums for policyholders.
How Much Does Homeowners Insurance in Texas Cost?
The average annual cost of homeowners insurance in Texas is $1,937, which equates to a monthly premium payment of around $161. This price is extremely high compared to the national average price of homeowners insurance of $1,211. Despite the overwhelming cost of Texas homeowners insurance, having homeowners insurance is both an important decision and a financial necessity. Similar to renters insurance, homeowners insurance protects your belongings and provides financial coverage for incidents that occur in your home, including thefts, injuries, and fires.
The cost of homeowners insurance will vary among all Texas residents. This is because everybody has different coverage needs and individual factors that affect the price, such as owning a dog. In fact, some insurance providers consider certain dog breeds, like pit bulls and rottweilers, high risks. Finding the right homeowners insurance policy is a mixture of getting quality coverage and customer service for the right price. Below, we discuss some of the most affordable homeowners insurance providers in Texas, as well as how you can lower the cost of your homeowners insurance.
Where Can I Find Affordable Homeowners Insurance in Texas?
Although the average price of homeowners insurance in Texas is $161 a month, you can find insurance providers that offer monthly premiums lower than that. Insurance providers in Texas that offer affordable prices and great coverage options include Hippo, Lemonade, Encompass, State Auto, Travelers, and Chubb. If you’re looking for a new homeowners insurance policy, we recommend that you start your research with one of those insurance providers. If you’re willing to spend a few extra dollars in exchange for more expansive coverage options, we recommend you check out Allstate and State Farm.
What Can I Do to Lower the Cost?
All homeowners should have homeowners insurance, but the high price of homeowners insurance in Texas can make it difficult to find rates that are in your budget. Because of this, it’s important to do what you can to save money. The first option you should look into is an insurance provider that offers a bundling discount. To gain customers, many insurance companies allow policyholders to bundle their homeowners and auto insurance policies and save money. In addition to this, you can find tons of other discounts that will help lower your monthly premium. For example, GEICO offers discounts to homeowners who have installed home security systems, fire extinguishers, and smoke detectors. These are household items that will not only save you money on homeowners insurance, but also keep your family and guests safe. Allstate is another insurance provider that offers plenty of discount options, including discounts for making payments responsibly and automatically, purchasing a new-construction home, and changing your insurance provider to Allstate.
Switching to a lower-cost homeowners insurer can help save on premiums. One of the best ways to lower the cost of homeowners insurance is by utilizing an insurance comparison website, such as BestInsurer. BestInsurer makes finding affordable homeowners insurance near your quick and easy. If you click on the button below, you will be led to a form, where you can enter your zip code. Then, BestInsurer will create a custom list of homeowners insurance providers and rates available in your area. If you want to save money on homeowners insurance, click the button below to get started.
Final Thoughts on Texas Homeowners Insurance
Although it can come at a high price, having homeowners insurance will help you with financial issues in the event of an emergency, such as a theft or an injury of a guest in your home. Homeowners insurance in Texas is among the most expensive homeowners insurance in the country—for several reasons. Texas is prone to various natural disasters, including tornadoes and hurricanes. This, along with lack of home inventory, inflation, and low interest rates, all contribute to the high price of homeowners insurance in Texas. However, there are plenty of ways to save money and still get quality coverage and customer service. First, you should check out rates from different insurance providers in your area. Many times, insurance providers offer discounts on homeowners insurance for bundling your home and auto policies, or for installing home security devices, such as security alarms and cameras. Next, you’ll want to use an insurance comparison site, like BestInsurer, to see what rates on homeowners insurance you can find in your city. Use the form at the top of the article to get started.