The Truth About Homeowners Insurance in Texas

Jennifer Hernandez • October 13, 2026

Why You Need to Rethink Your Homeowners Insurance—Every Year

If you’ve opened your mortgage statement lately and noticed your payment went up, chances are your homeowners insurance is to blame. Rates are rising rapidly—and it’s not just you.

I recently hosted a webinar with insurance expert Kathy Leger of Leger Insurance to unpack what’s going on and, more importantly, what you can do about it.

Here’s what every Texas homeowner needs to know.

What's Causing Rates to Rise So Fast?

Homeowners insurance in Texas is getting hit from all sides. Kathy outlined the four main drivers:

Weather Events: Even if a storm didn't hit your house, widespread weather damage in Texas (or across the U.S.) impacts rates.
Higher Cost to Rebuild: Labor and materials cost more than ever, and insurance companies pass that cost on to homeowners.
Reinsurance Rates: Most insurance companies are insured themselves—called "reinsurance." When those premiums spike, it drives your rate up, too.
Claim Volume: More claims = higher losses for insurers = higher premiums for all.

Texas is especially vulnerable. Coastal areas are at risk from hurricanes. Dallas-Fort Worth sits in hail and tornado alley. Rural homes face challenges like limited fire protection. No matter where you live, you're likely feeling the squeeze.

Why Shopping Annually Is More Important Than Ever

Homeowners insurance isn’t a “set it and forget it” kind of deal. Companies change guidelines, raise deductibles, add exclusions, and even cancel policies.

Every homeowner should:

Shop coverage annually (but do it smart—more on that below)

Watch for non-renewal or inspection notices in the mail

Choose an agent who proactively reviews your policy, not just one who sells it

Escrow Warning: How This Affects Your Mortgage Payment

If you escrow taxes and insurance (like most people), your mortgage company will do an escrow analysis once a year. If your insurance premium goes up—even just $500—you'll either:

Get a surprise shortage bill.
See your monthly payment increase to cover the difference.

Don't Ignore This:

Even worse? If your policy is canceled before you get a new policy or lapses, your lender can force-place coverage—and that’s often 4x more expensive and doesn’t cover your belongings or liability. If you see a cancellation notice in the mail, don’t ignore it!

What Triggers a Policy Cancellation?

Insurance companies often inspect your property AFTER you’ve closed. If they don’t like what they see—roof age, electrical panels, missing fences around pools—they can cancel your policy within the first 60 days.

Avoid cancellation by:
Asking your agent if the quote is contingent on inspection
Making sure your roof is under 12 years old
Verifying the condition of your HVAC, water heater, and foundation

Don’t Fall for the Low-Premium Trap

Some agents (especially in captive agencies) will lower your premium by raising your deductible or removing coverage—without clearly explaining it.

One common example: switching from Replacement Cost to Actual Cash Value (ACV) on your roof. That might save you $100/year but cost you $15,000 if you need a new roof.

Always ask your agent:

Do I have replacement cost or ACV?
What’s excluded from this policy?
What’s my deductible—in dollars?

Surprising Exclusions You May Not Know About

Most Texas homeowners policies do not cover these without endorsements:

Flood damage (always excluded, separate policy required)
Foundation damage from plumbing leaks
Water backup (sewage or sump pump failure)
Wind-driven rain (unless the storm caused an opening)
Dog bites or trampoline injuries if you didn’t disclose them

Cosmetic damage (like hail dents on metal roofs) is excluded.

Don’t Self-Insure—Here’s Why

Yes, some homeowners who own their homes outright are opting out of insurance altogether. But here’s the reality:

“If you can’t afford the annual premium, you definitely can’t afford to rebuild your house from scratch.” —Kathy Leger

Even one uninsured claim can ruin you financially. And if someone gets hurt on your property? Without liability coverage, you’re 100% exposed.

5 Smart Ways to Protect Yourself in 2025

Video your belongings: Once a year, walk through each room slowly with your phone and upload it to the cloud.
Get a personal agent: Not just a 1-800 number. You need someone who'll review your policy and warn you about changes.
Ask about endorsements: Water backup, foundation coverage, umbrella liability—don't assume you have it.
Reshop your policy 30–60 days before renewal: Get quotes, compare coverage, and ask for a side-by-side breakdown.
Watch your mail and email: Don't miss a non-renewal notice or inspection request.