Nobody wants to find out that theyâre paying more money for homeowners insurance in Texas. When you consider the fact that Texas already has a higher insurance premium than many other states, the news can be even more discouraging.
If youâre currently paying for homeowners insurance in Texas, understanding the reasoning behind the price increase might make you feel better. According to recent statistics, Texas is third on the national list for the most expensive homeownerâs insurance premiums.
The average annual cost of homeowners insurance Texas is almost $1,800. The bad news is that this amount is expected to continue to climb.
A Look at the Data
According to data from the Texas Department of Insurance, between 2010 and 2014, the cost of homeowners insurance in Texas grew by a staggering 26 percent. Currently, the only states that are more expensive for homeowners insurance are Florida and Louisiana.
As you can imagine, nobody is really happy about this data, but it does help to have a bigger picture of what is going on. According to Texas state officials, the dramatic rise in cost is due to violent weather. If insurance companies donât raise their rates, then theyâll go out of business and wonât be able to offer you homeowners insurance in Texas.
The reality of the situation is that Texas is home to a wide range of catastrophic weather. To name a few, Texas experiences frequent flood damage, hail storms, strong winds, wildfires and droughts. In recent times, North Texas has become the target of several notable hailstorms, which can cause millions of dollars in damages.
According to some of the data, the Dallas-Fort Worth area was hit by two of the strongest, costliest hailstorms to have ever been recorded. Since these storms occurred about three years ago, theyâre still fresh in the minds of many worried Texans.
The damage from these two major hailstorms exceeded $1.6 billion. Many thousands of Texans ended up paying for costly roof replacement. A number of homeowners who have homeowners insurance in Texas have filed lawsuits against insurance companies.
When you combine the lawsuits with the increased cost of roof repair, you end up with a dramatic rise in the average cost of homeowners insurance in Texas.
What is Causing Rates to Soar?
Many Texans are scratching their head and wondering what is causing the cost of homeowners insurance to rise to sharply. According to the Texas Department of Insurance, $1.8 billion dollars was paid for insurance claims in the first six months of 2015.
Itâs quite rare for a single storm to dramatically impact insurance rates, but a string of serious weather events can do the trick. Although itâs impossible to predict the cost of homeowners insurance in Texas for next year, itâs safe to assume rates will probably go up.
Fortunately, the Texas Department of Insurance must approve rate increases. Most Texas insurance companies use data from the last 10 to 20 years when determining how many losses theyâve taken. The potential costs of past and future disasters are factored into the price of your premium.
Minimizing Price Increases
While it might all seem like doom and gloom, the increasing cost of homeowners insurance in Texas doesnât have to be a depressing subject.
You can minimize the price increase that you experience by shopping around for coverage. Check local Texas insurance companies and try to find a cheaper policy. If you currently have homeowners insurance in Texas, you can raise your deductible.
By raising your deductible, you can reduce your premium by up to 20 percent. Another tip is to ask your insurance company for discounts because they almost always have discounts to offer.