Texas Lawmakers Struggle to Control Rising Home Insurance Costs

Texas Lawmakers Face Challenges in Curbing Rising Home Insurance Costs

DALLAS — Texas lawmakers are seeking solutions to the rising cost of homeowners insurance, even as they recognize the limitations of their ability to control these costs. Legislators have proposed bills aimed at limiting insurance rate hikes and helping homeowners make their properties more insurable. They are also trying to compel insurers to be more transparent when deciding to cancel or deny coverage.

Texans pay some of the highest insurance premiums in the country. On average, Texas homeowners saw their insurance rates increase by double digits in recent years, a significant change from the previous decade when such increases were rare. According to the Texas Department of Insurance, homeowners’ insurance rates rose by nearly 19% in 2024, slightly down from over 21% the previous year.

Insurance experts point to several factors driving these costs. Property values in Texas have surged due to the state’s population boom, increasing the cost to insure homes and businesses. Climate change has intensified extreme weather events like hailstorms, hurricanes, and winter freezes, making severe weather more common. As the state’s population grows, more people are moving into areas prone to severe weather. Higher labor and construction material costs have also driven up the cost of repairing damage from severe weather events.

Buying homeowners insurance is not an optional expense. Lenders require homebuyers to purchase insurance to obtain a mortgage. Even for homes that are paid off, insurance experts advise against going without coverage in case of disasters.

Lawmakers acknowledge that many factors driving insurance costs are beyond their control. “We can’t control the weather, we can’t control inflation,” state Rep. Tom Oliverson, a Republican from Cypress behind one such proposal, told a House committee last month. “I can’t control the availability of building materials, and I can’t control how the houses that are already built were built, what standard they were built to.”

One proposal by state Sen. Charles Schwertner, R-Georgetown, aims to give policyholders a check against steep rate increases. Senate Bill 1643 would require the Texas Department of Insurance to approve any rate increase above 10% before it can go into effect. The bill has cleared the Senate but awaits a committee hearing in the House.

The insurance industry has pushed back against this proposal. Beaman Floyd, who heads the Texas Coalition for Affordable Insurance Solutions, argued that capping rate increases doesn’t address the underlying drivers of rising insurance costs. Insurers might pursue lower rate increases than they otherwise would, potentially leading to financial liabilities that could result in policy cancellations.

Consumer advocates argue that the current system doesn’t provide a real check on insurers. They worry that insurers could circumvent the intent of the law by filing multiple rate increases, a practice the bill doesn’t cap.

Some proposals have garnered agreement from both insurers and consumer groups. House Bill 1576, authored by Oliverson, would create a state grant program to help homeowners retrofit their homes to withstand hurricanes and windstorms. The idea is that insurers will be more likely to insure homes that are hardened against severe weather, potentially lowering insurance costs.

Lawmakers are also considering other ideas, such as expanding the state insurance department’s oversight by adding more commissioners and requiring insurers to disclose why they deny or cancel coverage. The path forward remains uncertain as legislators navigate the complex issue of rising home insurance costs in Texas.