Climate Change Is Driving Texas Home Insurance Through The Roof

Texas has the third-highest home insurance rates in the nation, trailing only Florida and Louisiana. The reason is the same in all three states: climate change has increased the number of devastating storms.

Home insurance is a policy that protects a home in case of accidents or disasters. Mortgage houses are required to have it the same as they’re required to have full-coverage insurance for a financed car. Odds are it makes up a pretty significant chunk of a payer’s monthly bill.

In Texas the rates for home insurance have skyrocketed in the last several years according to a deep analysis done by the Houston Chronicle. Using U.S. Census data, they determined that between 2022 and 2023 alone home insurance rates rose 14 percent in Texas. They’ve risen 77 percent sense 2014.

That’s not even including windstorm insurance. Texas separates flood and windstorm coverage so that homeowners need to buy two policies for full protection. The cost of these policies can run $1,000 a year or more depending on the location.

Some states, such as California, have robust regulations for home insurance policies that protect customers from price-gouging rate hikes. Unfortunately, those regulations also mean a lot of carriers up and leave the state rather than sacrifice profits. Texas does not have that many regulations, meaning carriers can often charge whatever they want for coverage.

There’s no arguing that the price increase is due to climate change’s effect on the Atlantic storm ecosystem. In 2024 alone, there were $18 billion worth of weather events, which the National Oceanic and Atmospheric Administration is the highest in 40 years. These include all Atlantic hurricanes and tropical storms as well as he devastating derecho that hit Houston and multiple tornadoes.

As the Earth’s temperature rises thanks to manmade activity, it destabilizes the climate. Hotter oceans in particular mean far more intense and unpredictable storms, which often get stronger in hours rather than days. The loss of glacial mass in the north weakens the polar vortex, allowing cold weather systems to escape further south and clash with the warm weather, leading to major storms. More and worse storms means more claims, which leads to higher rates.

While some increase is understandable, the Chronicle’s report showcases how the regulatory bodies in Texas are likely failing customers. The Texas Department of Insurance has not forced a provider to get approval for a rate hike since 2007 and rejects 75 percent of rate filings asking for release for a rate hike. The leash for insurance providers is quite long in Texas.

The result is that many homeowners are forgoing insurance and hoping for the best if their houses are paid off. For those buying, they are leaving the market because they are worried they won’t be able to afford the rates. Climate change is getting very expensive in the Lone Star State for the average homeowner.