Texans pay 113% more on average than rest of U.S. for homeowners insurance. Here’s why

Dalia Faheid
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Texas is the second most expensive state for homeowners insurance after Oklahoma, with the average cost being $3,875 per year, or about $323 per month, according to NerdWallet.

That’s 113% more than the national annual average of $1,820. And it’s a lot worse for those with poor credit, who pay an average of $6,855 per year for homeowners insurance, according to NerdWallet’s analysis, 77% more than those with good credit.

The reason why homeowners insurance is so expensive in Texas is because the state is at worsening risk for a myriad of natural disasters, including hurricanes, wildfires, tornadoes and hail, which could damage your home. Severe weather contributes to higher-than-average labor and construction costs because there’s less supply and more demand. Those costs were already up due to supply chain issues and record-high inflation that started in 2020.

How much you pay for homeowners insurance depends on the Texas city you live in. Here’s what the averages look like in the state’s largest cities:

  • Houston: $4,595 per year, $383 per month

  • San Antonio: $2,900 per year, $242 per month

  • Dallas: $4,255 per year, $355 per month

  • Austin: $2,580 per year, $215 per month

  • Fort Worth: $4,535 per year, $378 per month

What do Texas home insurance policies cover?

Several types of severe weather in Texas could put your home at risk, namely hurricanes, hail, tornadoes and wildfires. Standard home insurance should cover damage from these events.

However, you may have to pay a separate insurance deductible for wind or hail damage because your insurer may not provide windstorm coverage as part of your policy. If that’s the case, you can buy windstorm insurance from a private insurer or get coverage from the Texas Windstorm Insurance Association if you live in a coastal county. Flood damage also isn’t covered by a standard policy, so you’ll need to purchase flood insurance if your home is at risk.

You can contact the Texas Department of Insurance, which oversees the Texas insurance industry, if you have questions or complaints about your home insurance. Call them at 800-252-3439.

What should homeowners look for in a policy in Texas?

If you have a mortgage on your home, your lender will likely require homeowners insurance. NerdWallet analyzed rates from insurers across Texas to find the best home insurance in the state. Consider buying homeowners insurance from one of these well-rated brands:

  • Chubb, 5 rating, $2,250 average annual rate

  • State Farm, 5 rating, $3,125 average annual rate

  • Farmers, 5 rating, $3,680 average annual rate

  • Amica, 4.5 rating, $4,565 average annual rate

  • Nationwide, 4.5 rating, $4,685 average annual rate

  • USAA, 5 rating, $2,700 average annual rate

  • Texas Farm Bureau, 4 rating, $2,370 annual rate

Use this home insurance calculator from MoneyGeek to estimate your policy cost. Get quotes from multiple insurance companies, then compare the rates to ensure you’re getting a fair price, Clark Howard recommends. Also, check the insurer’s website or call customer service to check if there are discounts available to lower your premiums. Don’t file small claims, as this can increase your homeowners insurance rate. If you can afford a higher deductible, you can save more money on your insurance.

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