Looking for affordable insurance for your Texas home? We’ve got three top picks for you.
Everyone knows they do it bigger in Texas. Hats, boots … home insurance premiums.
That’s right. The latest figures show that annual premiums in Texas cost an average of $1,955, the third-highest rate in the nation, after Louisiana ($1,987) and Florida ($1,960).1 That’s because of the other things they do bigger in Texas: tornadoes, hurricanes, and hail storms. It’s just an all-around riskier proposition for home insurers to protect homes in the Lone Star State.
That doesn’t mean you can’t find affordable insurance for your Texas home, however. On the contrary. It just means you have to choose wisely and know what to look for.
Homeowner’s Tip: There’s a lot more to explore about homeowners insurance than just rates. Our Texas-sized buyer’s guide to home insurance can help you get you started.
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Lemonade is shaking up the insurance industry with bloat-free premiums, pain-free settlements, and a focus on the customer experience. The only major stumbling block? Limited availability. Fortunately for our Lone Star readers, Lemonade is up and running in Texas.
First off, Lemonade uses AI to build accurate insurance quotes faster. That said, our experience simulating quotes for Texas homes with Lemonade was, like Texas itself, complicated. Corpus Christi, for example, was literally a washout. We couldn’t get insurance there. (Lemonade actually recommended an Allstate plan, a solid alternative in our book.)
Further inland, in Austin, the situation was much better. Lemonade quoted us a rate that was about $500 cheaper per year than the average Texas premium.
That’s probably the biggest takeaway we can offer you if you’re insurance hunting in Texas. Getting A+ home insurance really depends on where you live. As far as Lemonade goes, if you do manage to secure a quote from the hot pink rebels (that’s Lemonade), you can expect to save money.
In addition to better-than-average rates, Lemonade is also known as a digital-first insurance company. This is great for unbloating premiums. Just remember that Lemonade doesn’t have offices, so if a yearly visit to Jake in Laredo is part of your insurance routine, you won’t get that with Lemonade.
But you will get one of the best apps on the market (according to users), with excellent customer support, remote claims reviews, and instant payouts (where possible).
As for Lemonade’s standout customer service, we can personally vouch for this. Ours was fast and friendly inside Texas and out, both via email and human chat.
FYI: According to the Texas Department of Insurance, if you live on the coast, you’ll probably need to take out a wind and hail policy with the Texas Windstorm Insurance Association (TWIA).2
State Farm could be a very good choice for households in Texas because their protections are excellent and their prices are very competitive. Replacement cost value belongings coverage, for example, won’t cost you an arm and a leg with State Farm. But the most attractive perk for Texas homeowners struggling with higher premiums might be State Farm’s home and auto bundles, which can drive monthly bills down considerably.
So that there’s no confusion, like Lemonade, State Farm is going to be hit or miss in coastal Texas. It’s not fair; we get that, but it’s reality. If you live in a lower-risk area, on the other hand, you should be covered.
While Lemonade is reinventing home insurance by delivering overhead-free plans and digital convenience, State Farm (which has been around for 94 more years) is grounded in the kind of customer service most of us grew up with: office, agent, your signature in ink. And that approach seems to be working. State Farm ranked second out of 20 insurance companies nationwide for overall homeowner customer satisfaction in 2021, according to the number crunchers at J.D. Power.3
State Farm isn’t just a friendly neighbor. Their policies have muscle, with advanced coverage for Texas homeowners that includes current market value reimbursements for your lost or damaged stuff, extra rebuilding coverage for your home, and built-in insurance for your valuables.
These are just the kinds of protections you should be looking for in an insurance plan if you live in an area where tornadoes are common, because there are statistically greater chances that you’ll actually need them one day.
Finally, you’ll notice that State Farm’s rates are decent, but they aren’t going to knock down your Texas home insurance bill too much. State Farm’s bundles are another story. (A bundle means using one provider for more than one policy, by the way.) State Farm’s auto and home insurance bundles slashed our test Texas home insurance quote by 30 percent.
While we’d never recommend an insurance provider just because they’re cheap, State Farm’s bundles are more like icing on the cake, making them an even better value for money.
Homeowner’s Tip: If you strike out with State Farm online, there’s a chance a call to your local State Farm agent might land you an insurance policy, so always make that phone call before you throw in the towel.
Nationwide proudly writes home insurance in Texas, with offices in Houston, San Antonio, Dallas, Austin, Fort Worth, El Paso, Arlington, Bowie, Plano, and Laredo, which is good news for Texans. Nationwide’s homeowners policies are among the most flexible we’ve reviewed this year, with affordable add-ons and cheaper rates than many close competitors.
As we’ve tried to make clear above, the critical factor in securing solid home insurance in Texas is location. If you’re one of the fortunate few to fall asleep nightly to the sound of the waves on the Gulf, you’re also close enough to get hit by a hurricane, and chances are Nationwide isn’t going to insure your home. At the very least, you won’t be able to get a quote online.
Otherwise, Nationwide is an interesting case because, from the customer experience side, it’s a good compromise between Lemonade’s fully digital approach and State Farm’s 20,000 flesh-and-blood agents. Nationwide has a fleet of 11,000 reps with offices in all major cities in Texas, but they’ve also got a great online quote builder, where you can set up (and fine-tune) a quote all by yourself.
Speaking of quotes…
The quote Nationwide gave us for our test home was a good $20 more per month than State Farm’s. But consider what we got. Nationwide’s extended protections included replacement cost value (RCV) coverage for our belongings, inflation protection, building ordinance coverage (so we can rebuild to code), and roof replacement coverage.
Last, but definitely not least, while State Farm racked up kudos from satisfied customers, Nationwide is at the top of the charts for both overall satisfaction and claims satisfaction.4 That second satisfaction comes from getting a claims check fast with zero hassle. Again, if you live in a high-risk state where there are more claims than average, quick, no-fuss settlements are no minor perk.
Did You Know: Nationwide gives free, annual insurance audits that can help you redesign your policy for better savings and protection. To set up an On Your Side® Review, call 1-877-On-Your-Side.
USAA writes insurance only for active and retired members of the military, which is why they didn’t make our Best of Texas list. But their rates for Texas homeowners are among the lowest we’ve seen, so if you’re in the armed forces, USAA is definitely worth a gander.
USAA offers other perks for service members too, like home-sharing coverage (if you want to rent out your vacant property safely while you’re on active duty), free RCV possessions coverage, and identity theft restitution. Check out our USAA pricing and protections guide for a detailed breakdown of USAA’s coverage. For the full story on USAA, check out our hands-on USAA review.
Homeowners insurance can get tricky in Texas, especially if you live on the coast. So, while the top insurance providers we rated had to rank highly for the following SecureScore™ criteria, for our top Texas companies, we focused primarily on affordability and coverage, the main concerns of our Texas readers.
Standard HO-3 home insurance policies are the same everywhere. They cover your property (even your fence and garage), anyone on your property, and the expenses you incur if your home is uninhabitable after an accident or while you’re rebuilding or renovating. Any coverage beyond that will vary from provider to provider.
The thing to keep your eye on in high-risk areas in Texas (we’re thinking specifically of areas where tornadoes and hurricanes are regular events) is the amount of coverage your policy gives you. That coverage needs to be high enough in each of the following areas to get you back on your feet in the worst-case scenario.
Dwelling: This isn’t your home’s market value or even how much you expect your house to be worth in five or ten years’ time. To cover your property in the event of a disaster in Texas, you should be calculating local rebuilding costs with inflation figured in. The amount of recommended extra coverage varies from 20 to 50 percent of your base dwelling coverage.
Possessions: We’ve seen cases where insurers only offer ACV (actual cash value) coverage to homeowners in Texas, rather than the sturdier RCV (replacement cost value) coverage we recommend. This wasn’t our experience with any of the insurance companies on this list, but definitely double-check your belongings coverage before you sign on a policy in Texas.
Loss of use: For many of us, having to move out of our home might seem like a far-fetched scenario. But in areas prone to severe weather, you’ll want your homeowners policy to fully cover any period when your home is unlivable. Typically, insurance companies cap temporary living expenses at a percentage of your total dwelling coverage. Will this be enough for you?
Again, it’s great to have a helping hand when we’re at our most vulnerable, but living expenses boil down to numbers. So before you commit to a homeowners plan, whip out a calculator, consider how much temporarily relocating might actually cost your household, and crunch those numbers. If you come up short, you may need to tweak your loss of use coverage.
FYI: Struggling to find homeowner’s insurance in your neck of Texas? The Texas Fair Plan Association can help get you started.5
Texas is sort of a double whammy when it comes to homeowners perils. Homes in coastal areas, like Corpus Christi, are prone to hurricanes and flooding. Certain areas, like the Red River Valley in North Texas, are at high risk for tornadoes and the ensuing wind and hail damage.
So while Texas has its fair share of break-ins, vandalism, and fires, the most frequently reported claims are wind, hail, and water damage.
Water damage can get complicated no matter where you live. The important thing to grasp is that standard water damage coverage is for things like frozen pipes and leaking roofs, not floods or even backed-up sewers. (FYI: Flood insurance is always a separate policy.)
Unfortunately for Texans, some home insurers won’t even cover your property against wind and hail damage. This is a real doozy since these are core HO-3 protections for the rest of the country.
That’s definitely not great, but it’s not the end of the world either. As we pointed out above, you can get coverage against wind and hail; you may just need to take out a separate policy with the TWIA.
Did You Know: An average of more than 130 tornadoes touch ground in Texas every year. Nearly all of those twisters strike in April, May, and June.6
Every few years, the National Association of Insurance Commissioners (NAIC) publishes a massive report on home insurance rates throughout the nation. Number two on their list of factors that affect insurance costs is “catastrophic exposure.”
The examples of catastrophes they give are brush fires in the West, hurricanes on the Gulf, and tornadoes in the Southwest. Texas checks two of those three boxes at the moment.
And those aren’t hypothetical disaster scenarios. Texas has made nine disaster declarations since 2016, not as high as California’s 16, but at the high end of the national spectrum.
That’s one reason the average policy in the Lone Star State ($1,955) is a good $700 higher than the U.S. average ($1,249).
But that doesn’t mean you’ll get stuck with a monster bill just because you live in Texas. The NAIC’s rate is driven way up by the sheer number of outliers in high-risk Texas areas. As we saw above, if you live in the hill country around Austin — one “safe” area among many in the second-biggest state in the U.S. — you could be paying considerably less than the national average, as long as you pick the right home insurance provider.
Location isn’t the only factor that will affect your homeowners premium in Texas. Insurers will consider the age and condition of your house too. Our Austin test house was built in 2014, which means it has a newer roof and was probably built to code. Sturdier construction means lower premiums.
Insurance providers also consider the distance from your house to the fire department (just like Lemonade did). They give savings for “protective devices” like home security systems and fire and smoke alarms. They’ll even use your claims history to estimate your future risk.
The bottom line is — with or without catastrophes — insuring your home in Texas is like it is everywhere else. Your rate will depend on where you live, what condition your house is in, and your history of claims.
Homeowner’s Tip: Always make an inventory of any possessions you expect your insurer to cover. Photos and receipts help here. The better your documentation, the easier it will be to get reimbursed if you ever make a claim.
That’s the wrap on home insurance in the Lone Star State. We’ve seen that freak weather and high average premiums notwithstanding, you can find excellent home insurance that won’t necessarily cost you a pretty penny.
For the latest news on Texas homeowners policies — and any discounts in the pipeline — check back here from time to time. We’re always updating the information we have regarding the Texas homeowners market.
Why is home insurance in Texas so expensive?
Parts of Texas are at higher risk for natural disasters. This drives the average state premium up, but it doesn’t mean that premiums are high everywhere in Texas.
Is wind and hail damage covered by Texas homeowners policies?
For most of Texas, yes, but if you live on the coast, you may have to take out a separate policy with the TWIA.
How much does the average home insurance premium cost in Texas?
The average premium in Texas costs $1,955 per year, according to the NAIC. In our testing, however, we were quoted $1,486.
Is Texas considered a high-risk state for natural disasters?
Yes. If you live on the coast, in the Gulf region, or in the north in the Red River Valley, insurance providers will consider your property high risk and possibly refuse to offer you coverage.
Is it possible to get RCV coverage for my possessions in Texas?
Yes, both State Farm and Nationwide offer RCV coverage for Texas homes, but always double-check with your provider.
National Association of Insurance Commissioners. (2020). Dwelling Fire, Homeowners Owner-Occupied, and Homeowners Tenant
and Condominium/Cooperative Unit Owner’s Insurance Report: Data for 2018.
Texas Department of Insurance. (2021, Aug 30). Homeowners insurance guide.
J.D. Power. (2021, Sep 21). Home Insurers Struggle with Customer Loyalty as Boomers Flock to Rental Market, J.D. Power Finds.
J.D. Power. (2021, Feb 25). Surge in Digital Home Insurance Claims during COVID-19 Drives Faster Cycle Times and Improved Customer Satisfaction, J.D. Power Finds.
Texas Fair Plan Association. (2022). Home Page.
Texas Almanac. (2021). Texas Tornados.