Homeowners Insurance in Texas

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Chris Tepedino is a feature writer that has written extensively about auto insurance for numerous websites. He has a college degree in communication from the University of Tennessee and has experience reporting, researching investigative pieces, and crafting detailed, data-driven features. His works have been featured on CB Blog Nation, Flow Words, Healing Law, WIBW Kansas, and Cinncinati.com. ...

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Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Reviewed by Rachael Brennan
Licensed Insurance Agent

UPDATED: Mar 13, 2020

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If you're excited about buying your first home, then you probably haven't had a chance to sit down with your mortgage lender yet and learn all the minutiae that goes into purchasing and maintaining a home. The good news is that buying home insurance isn't as complicated as buying the home you are insuring; the bad news is that it isn't quite a walk in the park, either.

The wide variety of natural disasters that can cause property damage in Texas is pretty staggering. Between tornadoes, hurricanes, hail, floods, and more, it's a wonder homeowners insurance rates aren't higher than they are. The best way to protect yourself is with an HO-3 policy, also known as a "special form" policy. It provides some of the most comprehensive coverage available without costing an arm and a leg in yearly premiums.


Types of Coverage Coverage Amount
Replacement Cost (Dwelling) $250,000
Replacement Cost (Contents) $125,000
Personal Liability $125,000
Medical Expense $1,000
Deductible $1,000 (suggested)

Based on current Texas property values, the chart above contains recommended estimates based on a $250k home. Usually, insurance agents recommend $100k in liability coverage and at least 50% of your home's value for your personal property coverage. But you can discuss the specifics with your insurance company and figure out the best coverage for your home and property.

Average Homeowners Insurance Rates in Texas Legend: Average Rate Austin Dallas Fort Worth Houston San Antonio 150 300 450 600 750 900 1050 1200 1350 1500 1650 1800 1950 2100 $1036 $1634 $1751 $2245 $1152


There are only modest variations in Texas homeowners insurance premiums from one company to the next. But that doesn't mean you shouldn't get quotes from a few different companies before you settle on a policy. At the very least, you can save yourself between $200-$400 per year on your premium.

High & Low Property Insurance Rates in Texas Legend: Lowest Estimated Rate Highest Estimated Rate Austin Dallas Fort Worth Houston San Antonio 200 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400 2600 2800 $912 $1368 $1438 $2157 $1541 $2311 $1976 $2963 $1014 $1521

Laws and Requirements

The only way you are absolutely and unconditionally required to purchase home insurance is if you are using a mortgage loan in order to pay for your house. The vast majority of banks will require you to purchase some form of coverage, just in case. Once you finish paying off your house, or if you buy it outright in cash, you technically don't have to purchase insurance; but imagine how much financial trouble you will be in if some disaster destroys your uninsured home.

Taking a Home Inventory

You will want to have your home inventory ready and raring to go before you start shopping around for a good deal on your home insurance. If not, you could end up spending too much money on your personal property coverage. While this may seem insignificant, the truth is it can have a significant impact on your premiums. Overestimating leads to too much coverage, and higher annual premiums. Underestimating can save you money with lower premiums, but you'll have to shell out some serious cash when your insurer doesn't pay enough on your claims.

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Choosing What (and How Much) Coverage

The basic HO-3 policy that many Texas home insurance companies offer does not necessarily cover every potential disaster that your home or your property may face. Before you sign the paperwork on your policy, make sure to talk to your insurance agent about:

  • Wind/Hail - The northern half of the state is a breeding ground for severe weather. Despite its prevalence, as well as the high dollar damage it causes on a regular basis, things like hail and wind are covered on a standard HO-3 policy. And if you're unsure about the specifics of your coverage, then you might want to sit down with your agent and hammer out the details.
  • Tornadoes - Where you have wind and hail, tornadoes usually aren't far behind. Texas not only gets the highest average number of tornadoes each year, but it is the only state in the union whose average numbers soar into the triple digits. Thankfully, your average special form policy provides plenty of coverage from tornado damage.
  • Hurricanes - This is obviously a bigger problem for residents along the gulf coast than it is for inland Texans living in drier areas. Currently, most standard homeowners insurance policies cover damages associated with windstorms. But recent trends in the industry show many companies switching to applying a separate (and usually more expensive) deductible specifically for hurricane damage. Make sure you ask your insurance agent about the specifics so that you aren't caught off guard.
  • Floods and Water Damage - Whether you live on the coast or live inland near major bodies of water, you should be concerned about flood damage. But you're going to have a hard time finding a private insurance company willing to sell you flood insurance. It is rarely ever covered by private companies. But the National Flood Insurance Program can sell you modest coverage for a relatively fair price.
  • Covering Your Property - When you go over your insurance policy with your agent, make sure they explain to you clearly what your Part C (personal property) coverage actually entails. This coverage is usually limited to a list of named perils that your insurer will pay out claims on. If the named perils list doesn't cover everything you're worried about, then you have to ask for endorsements to be added to your policy.
  • Liability Coverage - Imagine a fireworks or gunfire accident on the 4th of July (which may or may not involve copious amounts of alcohol) happens on your property. What happens if you are deemed to be at fault? Well, having a comprehensive home insurance policy with plenty of liability coverage can come to your rescue. This coverage will help pay for legal costs and damages associated with the accident.
  • Umbrella Coverage - Do you need to purchase more coverage than your insurance company will let you? Then you need to ask your agent about umbrella coverage. This type of insurance is usually only reserved for people who have millions of dollars worth of property to protect; likewise, it has some pretty high premiums that go with it.

Replacement Cost vs. Actual Cash Value

Choosing between replacement cost coverage and actual cash value coverage involves navigating some tricky waters. Covering your dwelling and/or property with replacement cost coverage means that your insurance company will pay out more money if they decide to honor your claim - usually 100% of what it would cost to repair/replace the damage today. But having a lot of replacement cost coverage will cost you more in premiums.

On the other hand, actual cash value will save you money in premiums, but will cost you a pretty penny when you need to file a claim. Actual cash value subtracts the depreciation of your damaged property from your total payout. So if you're fixing an old roof or replacing a damaged refrigerator that is several years old, you will be paying your deductible + the cost of depreciation; your insurer will pay the rest.

How Your Credit Score May Influence Your Rate

Instead of making a hard check and looking at your entire credit history (which can be bad for your overall credit score), homeowners insurance companies in Texas often check what is called an insurance score. This score only includes your credit history with other insurance companies, especially with regard to claims filed and whether or not you pay your premiums on time. Your insurance score is usually higher than your full credit score, which can save you some money on your overall annual premium.

Texas Homeowners Insurance Rates by Credit Score Legend: Median Credit Homeowner Excellent Credit Homeowner Austin Dallas Fort Worth Houston San Antonio 150 300 450 600 750 900 1050 1200 1350 1500 1650 1800 1950 2100 $1036 $736 $1634 $1160 $1751 $1243 $2245 $1594 $1152 $818

Learn More

For more information, feel free to click any of the links you see in this article. They all lead to more detailed information about homeowner's insurance, specifics on purchasing a policy, and how to find the best deal. You should also contact local resources in your state, such as:

TDI Homeowners Insurance Resource Portal

The Official Texas State Government Website

National Flood Insurance Program

Credit Scoring in Texas

Or contact them directly through the following resources:

Texas Department of Insurance
333 Guadalupe
Austin, TX 78701
Phone: 1-800-252-3439

Email the TDI


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