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Homeowners insurance is not a legal requirement in Houston, Texas, although mortgage lenders will require it. However, homeowners insurance is a smart way to protect your investment in what is likely your largest asset. It can be expensive, though, so Bankrate’s insurance editorial team studied home insurance providers in Houston to help you find the cheapest and best coverage. On average, Houston homeowners pay $1,967 per year for a home insurance policy with $250,000 in dwelling coverage, which is significantly higher than the national average of $1,428 per year. According to our research, the insurers with the lowest average annual premiums for a $250K dwelling coverage in Houston are Nationwide and State Farm, with annual averages of $915 and $1,191, respectively.
Best cheap home insurance companies in Houston
Our process for determining the best cheap homeowners companies included evaluating several key attributes, including affordability, available discounts, policy customization options and third-party ratings for customer satisfaction from J.D. Power and financial strength from AM Best. We combined these metrics into a Bankrate Score on a scale of 0.0 to 5.0. The higher a company’s Bankrate Score, the more highly that carrier scored in the ranking categories. Based on Bankrate’s research and analysis of average annual premium data from Quadrant Information Services, the best cheap home insurance in Houston, Texas is offered by Nationwide, State Farm and Travelers.
|Home insurance company||Bankrate Score||Average annual premium for $250K dwelling coverage||J.D. Power score|
|Armed Forces Insurance||Not rated||$1,451||N/A|
Nationwide has the cheapest average cost for home insurance in Houston on our list. It also offers excellent coverage customizations, with multiple endorsements — such as valuables coverage, dwelling replacement cost coverage and better roof replacement — to expand your financial protection. However, while Nationwide received a higher-than-average claims satisfaction rating from J.D. Power, it does have a lower-than-average overall customer satisfaction rating.
Learn more: Nationwide Insurance review
State Farm is one of the most reputable home insurance companies, with a high rating from J.D. Power for both customer service and claims satisfaction. State Farm also has the highest possible financial strength rating of A++ (Superior) from AM Best. Although State Farm has below-average rates and excellent third-party ratings, it lacks in a few areas compared to its competitors. For example, State Farm offers fewer discounts for Houston homeowners than other companies in this review.
Learn more: State Farm Insurance review
Travelers may be a great option for Houston homeowners who are specifically looking to customize their policy with add-ons. Travelers offers lots of endorsements, including green home coverage, identity fraud coverage, valuables coverage, special personal property coverage and others. Multiple potential discounts are also offered through Travelers to help make rates more affordable. However, it does have a lower-than average J.D. Power score for both customer and claims satisfaction than some of the other providers we reviewed.
Learn more: Travelers Insurance review
Armed Forces Insurance
Armed Forces Insurance offers homeowners insurance in Houston to active duty military personnel, veterans and their families. The company offers multiple coverage add-ons and provides several ways to save on premiums, with potential discounts for insuring a new home, installing a security system, living in a gated community and having a newer roof, among others. Armed Forces Insurance offers low average rates to Houston homeowners, but it is limited in third-party ratings — likely due to its eligibility requirements.
Chubb has the most expensive average rates of the Houston home insurance companies we reviewed, but its average rates are still cheaper than the citywide average. Its standard policies also come standard with coverage types that typically cost extra with other home insurance companies, such as extended replacement cost coverage. The company has a superior A++ AM Best rating, a higher-than-average J.D. Power claims satisfaction score and a low complaint index from the NAIC, but its J.D. Power customer satisfaction score is lower than average.
Learn more: Chubb Insurance review
Home insurance coverage options in Houston
Although homeowners insurance is not mandated by law in Texas, lenders typically require homeowners to carry a policy in order to obtain a mortgage. Standard homeowners insurance in Houston includes coverage for your dwelling, other structures (such as a detached garage), your personal property and liability. However, you might want to consider adding optional endorsements or additional policy types to your home insurance portfolio for more financial protection. Here are some of the additional coverage options that might be beneficial for Houston homeowners:
- Water backup insurance: Houston homeowners may want to consider purchasing coverage for water backup. This type of damage stems from backed-up drains and sewage systems, as well as failed sump pump problems, and can lead to water damage. This type of damage is not typically covered by your basic home insurance policy and may happen following a hurricane or rainstorm.
- Equipment breakdown insurance: Normally, your insurance policy doesn’t cover equipment breakdowns caused by electrical or mechanical failure. You may have this coverage through a home warranty, but if not, you may want to look for a provider that offers an endorsement to cover things like major appliances and home systems.
- Flood insurance: A few major perils are not covered in standard home insurance policies, and one of them is flooding. However, many insurers work with the National Flood Insurance Program and can help you obtain a policy, and others underwrite their own private flood policies. Flood insurance may also be a requirement for Houston homeowners who have a mortgage and are in a flood zone. Even if you aren’t in a flood zone, you may want to consider getting flood insurance, as flooding can happen to anyone at any time and can be financially devastating.
Home insurance discounts in Houston
While it offers essential financial protection, insurance comes with a cost that many people would prefer to reduce. Fortunately, most insurers offer at least a few discounts that could reduce your home insurance premiums. Here are some of the most common ones that can provide policy savings:
- Loyalty discount: Many insurers offer a discount if you have been with the company for a certain number of years. Others give a loyalty discount to you just for switching to that company.
- Alarm systems: Insurers typically incentivize having things like smoke detectors, fire alarms and burglar-proofing for your home as those systems can protect against perils that could cause you to have to file a claim.
- New home: Some home insurance companies apply an automatic discount for insuring a newly purchased or newly built home. However, the qualifying time frame for a new home discount varies based on the specific carrier.
- Bundling discount: Most insurers will give you a discount if you have more than one policy with them. The most common bundles are for auto and home, condo or renters insurance policies. If you are happy with your insurer, it may pay to consolidate your insurance needs, especially if that means reduced premiums.
When it comes to home insurance discounts, it can be helpful to understand how much money you can expect to save. Every home insurance company’s discounts come with varying savings amounts. The best way to determine which insurer offers the cheapest home insurance in Houston for your situation is to compare quotes and discount options from several carriers.
Frequently asked questions
The best home insurance company for you may not be the same as the best one for your neighbor. To find the company that writes the best policy for your unique circumstances, it’s always a good idea to compare providers and get multiple home insurance quotes. If in doubt, speak with a licensed insurance agent to determine what your needs are.
In Houston, the average cost of home insurance is $1,967per year for a policy with $250,000 in dwelling coverage. This is more expensive than the national average cost of home insurance, which is $1,428 per year. In addition, Houston homeowners pay slightly more than the average Texan for home insurance; the statewide average annual rate is $1,860. However, home insurance premiums are highly personalized, so factors like your claim history, the age of your home and the size of your home may cause your premium to be cheaper or more expensive.
How much home insurance you need will vary by individual. Experts typically advise Houston homeowners to have enough home insurance to be able to repair or rebuild the home if it is destroyed completely. You can get a general idea of the starting point for these costs by multiplying construction costs per square foot in your region by your home’s square footage to get a starting number. A licensed insurance agent can help you figure out exactly how much you will need and which policies will best serve your needs.
Bankrate utilizes Quadrant Information Services to analyze 2023 current rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on 40-year-old male and female homeowners with a clean claim history, good credit and the following coverage limits:
- Coverage A, Dwelling:$250,000
- Coverage B, Other Structures: $25,000
- Coverage C, Personal Property: $125,000
- Coverage D, Loss of Use: $50,000
- Coverage E, Liability: $300,000
- Coverage F, Medical Payments: $1,000
The homeowners also have a $1,000 deductible and a separate wind and hail deductible (if required).
These are sample rates and should be used for comparative purposes only. Your quotes will differ.
Our 2023 Bankrate Score considers variables our insurance editorial team determined impacts policyholders’ experiences with an insurance company. These rating factors include a robust assessment of each company’s product availability, financial strength ratings, online capabilities and customer and claims support accessibility. Each factor was added to a category, and these categories were weighted in a tiered approach to analyze how companies perform in key customer-impacting categories.
Like our previous Bankrate Scores, each category was assigned a metric to determine performance, and the weighted sum adds up to a company’s total Bankrate Score — out of 5 points. This year, our 2023 scoring model provides a more comprehensive view, indicating when companies excel across several key areas and better highlighting where they fall short.
- Tier 1 (Cost & ratings): To determine how well auto and home insurance companies satisfy these priorities, 2023 quoted premiums from Quadrant Information Services (if available), as well as any of the latest third-party agency ratings from J.D. Power, AM Best and the NAIC, were analyzed.
- Tier 2 (Coverage & savings): We assessed companies’ coverage options and availability to help policyholders find a provider that balances cost with coverage. Additionally, we evaluated each company’s discount options listed on its website.
- Tier 3 (Support): To encompass the many ways a home insurance company can support policyholders, we analyzed avenues of customer accessibility along with community support. This analysis incorporated additional financial strength ratings from S&P and Moody’s and factored a company’s corporate sustainability efforts.