Texas Home Insurance Soars – Newsweek

Home insurance costs continue to grow in Texas as the risk of severe weather hitting the state rises and home prices climb, according to a recent report from online lending platform LendingTree.

The Lone Star State experienced the fifth-biggest home insurance premiums cumulative increase in the country between 2019 and 2024, with the cost of homeowners’ insurance shooting up by 54.5 percent, as per LendingTree’s estimates. During the same period, home insurance premiums rose by 37.8 percent. This year alone, home insurance rates have jumped 5.8 percent across the country.

The skyrocketing of home insurance premiums in Texas is closely linked to the rising home prices, the lending platform writes.

The cost of buying a home in Texas is now not so far from the peak reached in May 2022, when the median sale price of a home in the state was $372,000—up a staggering 18.0 percent compared to May 2021.

As of April, the median sale price of a home in Texas was on average $352,400, up 1.4 percent compared to a year earlier, according to Redfin. Home prices in the state have been steadily climbing since January, when the median sale price of a home in Texas was $332,000, after some ups and downs in the previous few months.

Inflation, which is still higher than the Federal Reserve’s goal of 2 percent, is also playing a role in keeping insurance costs growing, as building materials are now more expensive than they were before the pandemic. That means that reconstructing homes after a natural disaster or any other accident now costs homeowners and their insurers more than it used to be a few years ago.

The higher risk of extreme weather events hitting the state, which scientists estimate to be closely connected to climate change, is also leading insurers to increase premiums to meet potential mushrooming damage claims.

“Insurance companies have to repair more homes, and it’s more expensive to rebuild each one than it might have been just five years ago,” said Rob Bhatt, LendingTree home insurance expert and licensed insurance agent. “When their costs of paying claims go up, they turn around and raise our rates. This is affecting prices for just about everyone, including people who haven’t been directly impacted by a natural disaster, or at least not yet.”

Newsweek contacted LendingTree for comment by email on Wednesday morning.

According to LendingTree, the national average cost of home insurance is currently $2,478 per year. Texas had the fourth-highest home insurance premiums in the country, with an annual rate of $4,647. That’s 87.5 percent higher than the national average.

While Texans are struggling with higher home insurance rates, they’re by far not the worst off in the country. Arizona, Nebraska, Illinois and Utah saw larger cumulative increases between 2019 and 2024. In Arizona, home insurance premiums grew by 62.1 percent; in Nebraska, by 59.9 percent; in Illinois, by 56.9 percent; and in Utah, by 54.6 percent.

Home insurance rates are currently higher in Oklahoma (for an average of $5,478 per year); Nebraska (for an average of $5,363 per year); and Kansas (for an average of $4,825 per year).

According to Bhatt, home insurance premiums will soon cool down. “We’ve seen inflation settle down to levels well below its peak for several straight months, though it’s not as low as we need it to be,” he said. “There are also reasons to hope that home insurance prices are going to stabilize for at least a few years, as insurance companies have been able to bake in these higher cost projections into their higher new rates.”