Rising Insurance Costs in Texas
Homeownership is becoming increasingly expensive in North Texas as insurance premiums skyrocketed 22% in 2024, according to the Texas Department of Insurance. The surge is largely attributed to the rising frequency of severe storms and subsequent insurance claims.
The state has experienced more disasters resulting in $1 billion damages over the last five years than in the entire previous decade, as per the National Atmospheric and Oceanographic Administration. While legislators in Austin focus on reducing residential property taxes, insurance experts warn that not much can be done to mitigate the rising insurance costs.
Key Factors Driving Insurance Rates
- Severe Weather Events: Wind and hail have been the primary cost drivers in North Texas.
- Inflation: Rising costs of materials and labor contribute to higher insurance premiums.
Chandler Crouch, a Realtor with experience in lowering property tax bills for his clients, noted that many insurance carriers have stopped taking new business in North Texas due to significant storm-related losses. “I’ve been in the business since 2002, and I’ve never seen insurance rates this bad. It’s pretty bleak out there,” Crouch said.
Frank McArthur, a Tarrant County roofing contractor, highlighted the impact of rising material costs. One of his suppliers recently announced a 10% price increase, a significant jump from the usual 2-3% semi-annual hikes.
Impact on Homeowners and First-Time Buyers
The rising insurance costs are not only affecting current homeowners but also impacting first-time homebuyers. Paul Epperley, president of the Greater Fort Worth Association of Realtors, noted that increased insurance quotes can sometimes push monthly mortgage payments beyond lender-approved thresholds, potentially derailing home purchases.
To mitigate these costs, experts recommend:
- Obtaining insurance quotes early in the home-buying process
- Inquiring about potential discounts (e.g., for military service or home improvements)
Some states, like Florida, have implemented incentive programs to encourage homeowners to fortify their properties, potentially leading to insurance discounts. While Texas has some programs like Fort Worth’s Community Repair Program (offering grants up to $25,000), funding is limited.
As the situation continues to evolve, homeowners and prospective buyers must navigate these rising costs and explore available mitigation strategies.
