HOUSTON – In recent years, Texas homeowners have faced a daunting challenge: skyrocketing home insurance premiums.
This issue has become increasingly pressing, particularly following a series of severe weather events that have left many questioning the stability and affordability of their coverage.
The struggle for affordable coverage
Robert Dempsey, a Clear Lake homeowner, shared with KPRC 2 that he received a letter from his insurance provider, Kemper, stating they would no longer cover his area.
Kemper did not respond to KPRC 2 for comment.
“I thought it would be easy to find a new quote, but I was surprised by the high premiums and the number of companies that simply weren’t writing policies in my area,” he explained.
What followed was a grueling two-week scramble. Dempsey and his wife spent hours on the phone each day, contacting brokers and insurance companies. He said some providers quoted him premiums as high as $15,000, more than triple his previous $4,377 annual rate. Others refused to write policies in his area.
Eventually, Dempsey landed on a policy from a separate company. The premium was nearly $9,700. But even that came with strings attached, like a $300 roof sealing requirement, and later, a surprise mid-policy increase of $1,100 based on a recalculated rebuild value.
Dempsey’s experience is not unique. Many homeowners are grappling with similar challenges, as insurance companies increasingly withdraw from high-risk areas, leaving residents scrambling for coverage.
The current landscape of home insurance
Chase Gardner, a data insights manager with insurance comparison company, Insurify, said the average cost of home insurance in Texas was around $6,000 at the end of 2024, significantly higher than the national average of approximately $3,200. This figure is projected to rise by 9% in Texas, potentially reaching over $6,500 by the end of 2025.
The reasons for these high costs are multifaceted, with the primary factor being the risk associated with natural disasters.
“Texas has been hit particularly hard by natural disasters, with 68 separate billion-dollar disasters impacting the state over the last five years,” Gardner explained. “Almost any type of natural disaster that can damage your home, Texas is at risk for that disaster.”
This heightened risk has led some insurance companies to withdraw from the market altogether. In 2024, four smaller insurers ceased operations in Texas, resulting in over 10,000 homeowners losing their coverage.
The Texas Department of Insurance said that since 2024, four insurance companies have left Texas, while five other companies have been approved to enter.
Companies that exited the Texas market:
- Encompass Property and Casualty Insurance Company
- Encompass Home and Auto Insurance Company
- Encompass Indemnity Company
- Mountain Valley Indemnity Company
The Texas Department of Insurance spokesperson added, “The Kemper group of insurers has two subsidiaries that have been approved to exit in 2026, but other Kemper subsidiaries are still writing business in Texas.”
Progressive Insurance confirmed they “have temporarily restricted the ability of certain agents to sell new homeowners policies. Those temporary restrictions are not geographically based.”
Gardner said it could be too risky for some insurance companies to do business in the state.
“They all calculate risk a little bit differently,” Gardner said. “So, some of them, like Progressive, might say, it’s just too risky for us right now. And others say, you know, we’re able to charge higher prices, and that makes it a reasonable market for them.”
In addition to the risks posed by natural disasters, the costs of repairs and rebuilding have also surged. Gardner pointed out that the price of materials, such as lumber and drywall, has risen dramatically in recent years, further driving up insurance premiums.
“The price of lumber coming out of 2021 and 2022 was rising almost twice as fast as the national average for inflation,” he noted.
This combination of increased risk and rising repair costs creates a challenging environment for homeowners. Many are left with no choice but to seek coverage from state-run insurance providers, which, while offering some relief, often come with limited coverage options.
Community advocacy and awareness
John Cobarruvias, another Clear Lake homeowner and consumer advocate, has been vocal about the insurance crisis affecting the state.
“The premiums in this area are out of the roof. Our deductibles are unreasonable,” Cobarruvias stated.
He has been tracking his insurance rate increases since 2003, noting that despite reforms intended to protect consumers, the situation has only worsened.
“I went from paying $750 with a $500 deductible to $9,000 with a $9,000 deductible,” he said.
“That’s not insurance. That’s extortion,” he said. “I was forced into the Texas FAIR Plan, which offers limited coverage, but at least it brought me back to paying under $6,000.”
The Texas FAIR Plan is a state-run insurance pool designed as a last resort for homeowners who can’t find private coverage. The FAIR Plan was established in 1995 by the legislature to create “the Texas Fair Access to Insurance Requirements Plan – commonly known as Texas FAIR Plan Association, FAIR Plan, or TFPA – to deliver residential property insurance to Texas residents in areas designated by the Commissioner of Insurance as underserved.”
Data obtained by KPRC 2 shows a significant number of applicants to TFPA in 2024.
Between 2020 and 2022, TFPA saw fewer people applying for the policy. But by 2023, the number started climbing with 11,174 polices written then 2024 saw the highest increase with 41,234 policies.
A spokesperson for TFPA said they don’t keep track of the number of canceled policies: “The actual declinations are documented by the applicant’s insurance agent.” However, to qualify for TFPA, applicants have to have been declined coverage by two private-market insurers.
“FAIR Plan issues policies on more than 99% of applications, so this data is very close to the data on applications,” the TFPA spokesperson said in an e-mail to KPRC 2’s Rilwan Balogun.
The Texas Department of Insurance shared that despite the difficulties, they can help consumers get access.
TDI offered this advice for people looking for insurance:
- Start shopping around. Have a new policy in place before your current policy expires.
- Consumers can start at HelpInsure.com. This website compares sample rates and policies from insurance companies selling in their area.
- Consider working with an independent agent who can compare policies from different companies.
- If at least two companies refuse to insure your home, you might be able to buy a policy through the state’s homeowner insurance provider of last resort, the Texas FAIR Plan Association.
Both Dempsey and Cobarruvias are calling for state intervention to address the growing cost of insurance. They argue that the government needs to take a more active role in regulating insurance companies and ensuring that homeowners have access to affordable coverage.
“If the insurance companies can’t do the job, maybe it’s time we tell them to get the hell out,” Cobarruvias asserted.
