Cost of New Home Insurance Premiums in Texas

Many in Houston are concerned the city and state are becoming unaffordable, but we’re pressing Texas Lawmakers to address rising insurance premiums. Why? With each rise in home insurance premiums, many people are antsy about the cost of living in a state known for being supremely affordable. Add the recent impacts of inflation on the cost of labor and materials and it is easy to understand why prices for homes as well as insurance have been going up.

While home insurance is bought for individual properties, it’s a regional market, so it all depends on where you live in the state. That’s why Texas legislators are working to pass a statewide law to protect home owners by requiring insurance companies to get approval from the Texas Department of Insurance before they raise insurance plan premiums by 10% or more. About 20 years ago the state moved to a “file and use” system, which allows insurance companies to raise premiums unless regulators come back later and deem the increase unnecessary. The change back to a “prior approval” system would be through Senate Bill 1643. It’s already passed the Texas Senate. The next step will be a hearing in the Texas House.

So far in 2025, insurance companies filed 108 premium plan increases of 10% or more… fewer than in the past few years. In 2024, companies filed 293 increases with the Texas Department of Insurance. In 2023, they filed 362. Companies were implementing significant rate increases without oversight. Currently, there is no upper limit to a rate increase in Texas. The increases over the years have caught everyone’s attention and has brought scrutiny from those who worry company profits are leading to a housing crunch.

Companies and lobbyists argue it’s not profits driving the increase in premiums, but larger market or economic forces.

The insurance marketplace appears to be stabilizing after the inflation-induced shock of 2023. That’s why fewer companies have filed 10% increases this year with state regulators.

Even so, a separate bill sets the ‘prior approval’ rate at 5%, but that proposal doesn’t appear to be getting bipartisan support. Critics have argued that SB 1643 won’t solve the problem completely because insurance companies can still raise premiums by 8% or 9%.

The deadline for Senate bills to pass House committees is June 2nd.

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