Texas Homeowners Face an Insurance Crisis: Rising Rates and Tough Choices
The cost of home insurance in Texas is skyrocketing, leaving many homeowners struggling to keep their coverage—or even questioning if they should keep insurance at all. A recent ABC13 Houston investigation found that insurance rates in the state have soared in recent years, with some homeowners seeing their premiums increase by 25% annually—a trend that has made homeownership more expensive and uncertain.
With extreme weather events becoming more frequent and insurance companies pulling out of Texas, residents are facing tough decisions. Some are forced into the Texas FAIR Plan, a last-resort insurance option for those denied coverage, while others are considering going without insurance entirely—a risky gamble in a state prone to hurricanes, tornadoes, and hailstorms.
How Bad Is the Insurance Crisis in Texas?
For homeowners like John Cobarruvias, who has lived in Clear Lake since 1989, the increases are unsustainable. He once paid $750 per year for home insurance with a $500 deductible. Today, his premium has skyrocketed to $6,000 annually with a $9,000 deductible—making him question whether keeping insurance is even worth it (ABC13 Houston).
Cobarruvias isn’t alone. ABC13 Investigates analysis of Texas Department of Insurance data found that the number of rate increases by insurance companies has more than doubled over the past decade. Even more concerning, the state found no issues with most of these increases, meaning homeowners have little recourse to challenge these soaring costs.
Why Are Texas Home Insurance Rates So High?
There are several reasons why Texas homeowners are experiencing these extreme rate hikes:
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More Frequent & Severe Weather Events
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In 2023 alone, Texas experienced 20 major weather disasters, including hurricanes, severe storms, and wildfires, totaling over $20 billion in damages.
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Insurance companies say these disasters have increased claim payouts, leading them to raise rates or stop offering coverage in high-risk areas.
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Insurance Companies Control the Pricing System
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Unlike some states that require prior approval before insurers raise rates, Texas allows a “file and use” system—meaning insurers can raise rates first and justify them later.
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Consumer advocates, including Texas Watch Executive Director Ware Wendell, argue that this system leaves homeowners vulnerable to overpricing.
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Soaring Costs of Labor & Materials
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Inflation has driven up the price of home repairs and rebuilding, leading insurers to adjust their premiums accordingly.
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As Wendell puts it: “If lumber costs more, then the insurance that you buy to protect your home is going to cost more.”
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What If You Can’t Get Insurance?
For homeowners who can’t find affordable coverage, the Texas FAIR Plan is often their only option. Created by lawmakers as a last-resort insurer, it provides basic coverage for Texans who are denied policies elsewhere.
The problem? It’s not a long-term solution.
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At the end of 2024, the Texas FAIR Plan had 61,774 policies statewide—with the highest concentration in Harris, Fort Bend, and Galveston counties.
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Homeowners like Robert Dempsey have struggled to find private insurers still operating in the state. After being dropped by his provider, he had to shop around extensively before securing coverage—at a much higher rate.
Are Texans Dropping Insurance Altogether?
Some homeowners are considering going without insurance, especially those who have already paid off their homes.
Cobarruvias, who has only filed two claims in 30 years, is debating whether to self-insure—setting aside money instead of paying rising premiums.
“We would take that money and put it into an account. Hopefully, after five or six years, we’ll be able to cover the cost of repairs,” he explained.
But this is a major gamble, especially in a state that frequently experiences hurricanes, floods, and hailstorms. One major disaster could wipe out a homeowner’s savings and leave them in financial ruin.
What Can Homeowners Do?
If you’re facing an insurance crisis in Texas, here are a few steps you can take:
✔️ Shop Around – While the market is tight, comparing quotes from multiple providers can sometimes lead to better rates.
✔️ Consider Discounts – Some insurers offer discounts for bundling policies or investing in home improvements like impact-resistant roofs.
✔️ Review Your Coverage – Make sure your policy covers what you need, but also look for areas where you can cut unnecessary coverage.
✔️ Consult an Insurance Attorney – If you’ve been dropped, denied, or underpaid, seeking legal guidance can help you fight for fair treatment.
How Chad T. Wilson Law Firm Can Help
At the Chad T. Wilson Law Firm, we fight for policyholders when insurance companies fail to uphold their promises. Whether you’re facing:
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A denied or underpaid claim
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A sudden non-renewal
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Unjustifiably high rate hikes
Our experienced attorneys are here to help. We don’t get paid unless you do, so there’s no risk in reaching out for a free consultation.
Has your insurance company denied or underpaid your claim? Contact us today!
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