Texas Homeowner Insurance Market – Commentary & Analysis (Part 1)

Many home insurance carriers in Texas have reduced or frozen their underwriting business for new policies. However, unlike Florida and California, major insurance companies have not completely withdrawn from the Texas market. There are still over 100 companies offering home insurance in various regions of the state. Despite this, there are restrictions on new policy writing due to recent disasters like wildfires. Insurance carriers aim to avoid concentrated risk and are cautious about expanding their policies in vulnerable areas. This caution is driven by the need for geographic diversification to manage potential losses effectively. As a result, rising insurance premiums remain a concern.

The state of the home insurance market in Texas has significant implications for homeowners, buyers, sellers, and real estate agents statewide. The restrictions and rate hikes have raised concerns and prompted Bubble to closely monitor the situation. We are analyzing the causes behind these developments and their potential impact on current and future homeowners in Texas.

The restrictions mainly affect new home insurance policies rather than renewals. Climate change and its unpredictable and severe events, like wildfires, hurricanes, and flooding, have led to increased claims payouts, affecting insurance carriers’ loss ratios. Texas’s high inflation rate, especially for building materials, has rendered previous premium rates inadequate due to rising residential construction costs. Increased labor costs and supply chain issues have further worsened the market situation. The shelter component of inflation has risen by 9.9% annually, while construction costs have increased at a rate of 13 to 15% annually.

Texas is highly susceptible to hailstorms, experiencing an average of 25 to 30 hail days annually, and ranks second in the country for the total number of wildfires.

Here are some of the Texas metro area level hazards and risks and the common claims there –

AreaCommon Insurance ClaimTop Property Risk
DFWFire, Wind & Water DamageLightning
AustinTheft, Freezing Water & Water DamageHail
San AntonioTheft, Freezing Water & WindLightning
El PasoWater Damage, Freezing Water & WindFlooding
HoustonTheft, Freezing Water & Water DamageFlooding

In recent years, while replacement and rebuilding costs surged, home insurance premium rates in Texas either remained static or inadequate. Texas operates as a “file and use” state, making the process of formalizing upward rate revisions simpler. Insurance carriers can file their rate increase request with the Texas Department of Insurance and implement the changes without waiting for official approval. Regulators may seek data from the companies for clarification, but overall, the approval of rate hikes is a relatively smooth process.

Geographic-based underwriting is the way forward for precise risk assessment and pricing. Improved coordination, private-public partnerships, and fair regulations can tackle the pressing concern: affordable home insurance rates for Texas homebuyers. Bubble leads in climate impact assessment with our unique Bubble HomeScoresTM, covering perils by zip code in Texas and beyond. Expect city-specific guides for homeowners to counter climate change, plus frequent market updates.


  • The move by insurers refers mostly to new policies and not renewals. There are restrictions by counties, zip codes, and regions where new underwriting has been frozen by many carriers on a temporary basis.
  • The reasons: Climate change, unpredictability, inflation, and uncertainty over optimum premium rates. 
  • Premium rates have remained inadequate while costs to replace and rebuild have surged over recent years.
  • The home insurance market, while hardened, is not inactive. A number of carriers are still writing policies in different parts of the state.
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Pallavi Shastry
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