The old adage that “everything is bigger in Texas” can be applied to homeowners insurance as well. Texas is ranked sixth as the most expensive state for homeowners insurance, with an average rate for homeowners insurance in Texas is $1,863 per year. This is 42% higher than the national average annual premium of $1,312 a year. Texas residents know that the Lone Star State is subject to many hazards, including tornadoes, sinkholes, hurricanes and wildfires. Therefore, it is essential to have the best home insurance in Texas to protect your finances, should something happen to your biggest asset, your home. Luckily, homeowners have plenty of insurance companies to choose from when it comes to home insurance.
The best home insurance companies in Texas
The table below compiles the five most well-known and well-reviewed insurers in Texas according to the 2020 J.D. Power U.S. Home Insurance Study.
|Home insurance company||Average annual premium for $250k dwelling||J.D. Power score|
Amica Mutual routinely ranks as one of the best insurance providers in the country. This comes from J.D. Power, AM Best and individual customer reviews. Amica offers a wide range of insurance products, including home, auto, umbrella and even flood insurance.
One of the most unique features about Amica is its dividend policy. Policyholders who choose this option are eligible to get up to on average 20% of their annual premium back each year.
Learn more: Amica Mutual Insurance review
State Farm is a national insurance provider that offers multiple insurance products along with homeowners insurance. For example, you can get car insurance, motorcycle insurance, life insurance, boat insurance and many others. Policyholders who purchase more than one policy type with State Farm can save with their multi-policy discount.
State Farm offers a slew of coverage options and can even work with the National Flood Insurance Program on your behalf to obtain coverage for flood damage.
If you are looking for a company that offers discounts and convenient ways to access your account either online or via a mobile app, State Farm may be a good choice.
Learn more: State Farm Insurance review
Allstate offers numerous coverage options, as well as a variety of ways to save on your premium. One of Allstate’s most unique features is its online presence. It offers a variety of tools and free resources on its webpage for both members and non-members. Members can learn more about Allstate’s insurance products and learn how to make the most of their policy.
Learn more: Allstate Insurance review
Farmers is a full-service insurance provider that offers home, auto, renters, business, condo and life insurance. It offers three customizable homeowners insurance plans for its members to choose from: Standard, Enhanced and Premier.
Farmers also offers unique features to help customize your policy. You can enroll in the Declining Deductibles program, which lowers your deductible by $50 for each year that your policy is in force. You may also want to consider the cosmetic damages option or claim forgiveness.
Learn more: Farmers Insurance review
USAA currently sells insurance only to active or former military members and their families. However, if you are eligible, USAA may be a great option. You can do everything that you can do with other insurance providers, such as bundle and save, choose from a variety of coverage options and do everything you need to do via its mobile app.
USAA offers unique protections to service members. For example, active-duty or deployed service members can rest assured that their military uniforms are covered. Additionally, USAA is member-owned, so its customers may get paid dividends each year just for choosing USAA as their insurance provider.
Learn more: USAA Insurance review
Average cost of homeowners insurance in Texas
Texas homeowners insurance premiums are higher than other states due to the increased number of natural disasters. Insurance premiums are largely based on risk, and if an area has a greater likelihood of homes being damaged, the premiums are generally higher so that insurance companies can prepare for a potential claims payout. To help reduce your premium, you may want to shop around to take advantage of available discounts and find the best price.
The average insurance premium for a Texas homeowner is $1,863 for a $250,000k dwelling. Texas homeowners pay quite a bit more than the national annual average of $1,312 for homeowners insurance due to the environmental hazards and geographic location.
Texans are not alone in paying more than the national average premium for homeowners insurance. In fact, none of the states that border Texas feature lower-than-average premiums. The average annual premium in Oklahoma is $3,519, likely due to the high risk of tornadoes and wind damage. The average premium in Louisiana is $1,813 per year, and policyholders in Arkansas pay an average of $2,142 per year.
Home insurance coverage options in Texas
Buying homeowners insurance does not need to be overwhelming and stressful. Below, find some information on the type of insurance coverage you’ll most likely encounter and what they are used for:
- Dwelling coverage: This is your standard insurance policy and it covers the physical structure, your dwelling, of your property.
- Personal property coverage: You want personal property coverage for your belongings, whether inside or outside of your home.
- Liability coverage: Personal liability protection covers you in case someone is hurt on your property or you damage another person’s property.
- Guest medical protection: This coverage is specifically to cover people who are injured on your property.
In addition to these standard types of insurance coverage, most insurance companies offer coverages that you may want to consider:
- Flood insurance: If you live in or near a flood-prone area, you may want to consider buying a separate flood insurance policy to help repair damages in the event your home floods. Though you can get an idea about whether or not you live in a flood-prone area by inputting your address into a FEMA flood map, you will also want to also look at your area’s history of flooding. In some cases, you may be required to purchase flood insurance, and it can be expensive. It is important to be aware of your flood insurance requirements prior to moving to an area.
- Wind/hail coverage: According to the Texas Department of Insurance, if you live near the coast or on Galveston Bay in Harris County, your homeowners policy will exclude wind coverage. This is due to the increased risk of hurricane-related damage to your home. In cases where you cannot get coverage through your insurance company, the Texas Windstorm Insurance Association (TWIA) can help provide coverage.
- Seepage and leakage: This endorsement may cover damage from slow leaks or seepage from cracks.
- Water backup coverage: This option provides coverage for the backup of drains or sewer lines, often from sump pumps not being able to keep up with heavy rains.
Although historically flood insurance could only be purchased from the U.S. government, some private carriers do now offer flood insurance policies. You can call your agent to see if they can facilitate your purchasing of a policy through the National Flood Insurance Program (NFIP), or if they have any private carriers who offer flood coverage.
Texas common causes of loss
In Texas, there are types of claims that are more common than others. Home damage caused by nature is a common occurrence and is one of the reasons why you should have home insurance.
Hurricanes represent one of the most significant sources of claim costs in certain areas of Texas. As the National Oceanic and Atmospheric Administration (NOAA) notes, “It is estimated that Hurricane Harvey alone had total costs of $125 billion” — which made landfall in Texas in 2017. Covered perils that are the most common homeowners insurance claims in Texas are:
- Water damage, including plumbing issues and burst pipes, but not including flood damage
- Hail damage from thunderstorms and hurricanes
- Wind damage from thunderstorms, hurricanes and tornadoes
- Theft and/or burglary of property
- Fire damage caused by lightning
You will want to be very careful about your policy as it concerns wind and hail. If you live near the coast, your policy may exclude wind and hail damage or you may have a higher deductible. Check for exclusions for roof damage caused by hail and consider purchasing additional coverage if needed.
If you have any questions about a policy, it may be a good idea to talk to an insurance agent. A licensed insurance professional can review your policy and help identify areas where you may need to purchase separate coverage or adjust your current coverage.
Home insurance coverage options to consider in Texas
Each homeowner in Texas will have a unique policy, likely tailored to the risks they believe are most important. However, there are some risks that nearly all Texas residents should consider insuring against.
- Wind and hail damage: In parts of northern and eastern Texas, tornadoes are common and can cause widespread wind damage. If you live in these areas, it may be wise to check if your policy covers damage caused by wind and hail.
- Hurricanes: The Gulf coast of Texas is frequently affected by hurricanes, which can also often track north and east across the state. A standard home insurance policy may not always cover hurricane damage, so homeowners in these areas of Texas may need to purchase separate hurricane insurance.
- Flooding: Many parts of Texas are at risk for flooding, and the average flood insurance claim paid by the National Flood Insurance Program is $54,200, higher than the national average claim amount of $52,000. Most home insurance companies exclude flood damage in their standard homeowners insurance policies. Homeowners may want to consider a separate policy.
Because Texas is a large state and the types of insurance risks can vary greatly depending on where you live, it may be best to work with a licensed agent to determine what coverages you should consider insuring your property against.
Frequently asked questions
What is the cheapest homeowners insurance in Texas?
The cheapest insurance in Texas depends on a number of factors, including the value of your home, the area in which you live, what type of home you live in and what type of coverage you select. Your deductibles and coverage limits will make up a portion of the cost.
How do I get homeowners insurance in Texas?
If you need homeowners insurance, obtain quotes from multiple insurance companies to compare rates, coverage options and discounts. Understanding your home’s characteristics, like square footage, roof type, safety features, etc., will help insurers determine how much your home would cost to rebuild. Knowing these details will be important when obtaining quotes. You will also want to have an idea of how much your personal belongings would cost to replace and what deductible you would feel comfortable paying in the event of a claim.
Additionally, knowing what factors matter most to you in an insurance company will help you to narrow down your options. Are you most concerned with price? Does financial stability matter to you? What about customer reviews? If you are unsure where to start, a licensed agent may be able to help you find the right policy for you.
What do I need to get homeowners insurance in Texas?
Whether you are buying your home or just looking to switch to a new insurance provider, you will likely need to provide some personal information, as well as your home’s address. Any additional information that is needed will be requested by the insurance provider.
Bankrate utilizes Quadrant Information Services to analyze 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 may be different.
Rates are determined based on 2021 Quadrant Information Services data.
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We use two key sets of customer priorities to evaluate insurance carriers and help you decide what to consider:
First: we evaluated customer satisfaction and complaints, financial strength and stability and overall costs based on average rates quoted to real drivers.
Second: we evaluated customer experience by assessing each provider’s customer service options through online capabilities and agent accessibility.