We have spoken to customers who have moved to Texas from another state, and they are shocked when presented with a new Texas homeowners insurance quote. And the question is always – WHY SO HIGH?? Part of that answer is that Texas is prone to natural disasters and inclement weather, such as hail, hurricanes, and tornadoes. Simply stated, Insurance providers must charge more money for homeowners’ insurance to be able to pay expensive claims for damage to homes caused by our natural disasters.
Let’s begin with hailstorms. North Texans know it is a matter of when rather than if a hailstorm comes our way. According to The National Weather Service, Texas has more hail claims per capita than other states, with respect to population density. This has created a situation that requires insurance companies to charge higher premiums to account for such large losses. Hail claims are the number one claim filed against home insurance in Texas. And that causes our rates to be higher than you might find in another state.
Now for our hurricanes… Gulf Coast hurricanes generate huge losses. Even if we are in North Texas, far away from the coast, those losses affect us even though we are not directly “hit” by the storm damage. Our premiums are affected because insurance is technically the spreading of risk across a large pool of customers. As a result, we see our premiums increase just as others in a different area of the state might see theirs increase for our hail claims.
Wildfires and brushfires over the last several years have created enormous losses for the Hill Country region. These fires also produce large losses. We have experienced this during early Summer 2022, with extraordinarily little rain, drought in most of the state and fires spreading in rural as well as urban areas. Again, it is about insurance companies spreading the risk across a large pool.
One more reason for increasing insurance premiums is that recently, the cost of lumber, copper and most raw materials has gone up dramatically. This has had a direct effect on the price of homeowners insurance. The inflation of those prices means the cost of repairing a home is also increasing. The price you pay for the supplies AND the labor for repairs is now higher.
Other factors influencing the price of homeowners insurance might include the location and age of your home, but the biggest driving factors are the storms and fires which continue to worsen, causing extensive damage to homes all over the state. Insurance companies account for this by charging higher rates. As an agent, we don’t enjoy presenting a quote to a customer that results in sticker shock. However, although it may come at a high price, having homeowners’ insurance will help you with financial issues in the event of an emergency, such as a theft or an injury of a guest in your home.
We service homeowners all over North Texas and are proud to provide friendly and prompt customer service. We would love to provide you with a quote for your home and hopefully bundle other insurance with it for discounts. Let us earn your business and your trust, hopefully with no sticker shock.
