Texas lawmakers are taking steps to address the rising costs of homeowners’ insurance, even as they recognize that many factors driving these increases are beyond their control. Recent legislative efforts include bills aimed at limiting how much insurance companies can raise rates and improving transparency for homeowners regarding coverage decisions.
In Texas, homeowners are facing some of the highest insurance premiums in the nation. The Texas Department of Insurance reported that rates jumped by nearly 19% in 2024, a slight decrease from over 21% the previous year. This surge follows a decade where such increases were rare. Factors contributing to the rising costs include soaring property values due to population growth, the impact of climate change leading to more frequent extreme weather events, and increased costs for labor and construction materials.
Insurance is a necessity for homeowners, especially for those with mortgages, as lenders require it. Even homeowners who have paid off their mortgages are advised to maintain coverage to protect against potential disasters.
While lawmakers are seeking solutions, they acknowledge that they cannot control the weather, inflation, or the availability of building materials. State Representative Tom Oliverson emphasized the challenges lawmakers face in trying to manage insurance costs without discouraging insurers from operating in Texas.
One proposed bill, Senate Bill 1643, aims to require the Texas Department of Insurance to approve any rate increase above 10% before it can take effect. This proposal has passed the Senate and is awaiting a hearing in the House. Senator Charles Schwertner, who introduced the bill, believes it will provide necessary scrutiny over large rate changes.
However, the insurance industry has expressed concerns, arguing that capping rate increases does not address the root causes of rising insurance costs. Beaman Floyd, head of the Texas Coalition for Affordable Insurance Solutions, warned that such measures could lead insurers to limit their rate hikes, potentially resulting in financial instability for them and fewer options for consumers.
Consumer advocates support the idea of increased oversight but worry that insurers might circumvent the intent of the law by filing multiple smaller rate increases, which the bill does not limit. They argue that this could lead to a situation where consumers face a series of smaller hikes rather than one large one.
In addition to rate increase regulations, lawmakers are considering other proposals. One initiative would create a grant program to help homeowners retrofit their homes to better withstand severe weather. This program aims to make homes more insurable and lower insurance costs. Another proposal seeks to increase the number of commissioners overseeing the Texas Department of Insurance, with one commissioner specifically focused on consumer advocacy.
As discussions continue, lawmakers are also looking into measures to prevent insurers from bundling homeowners and auto insurance and to ensure that companies clearly disclose reasons for denying or canceling coverage.
The outcome of these legislative efforts will depend on negotiations between the House and Senate and the state’s budget decisions. As Texas grapples with rising insurance costs, both consumers and lawmakers are hopeful for solutions that will provide relief without compromising the stability of the insurance market.