A new report from the Insurance Information Institute (Triple-I) underscores the growing complexity of Texas’s natural disaster risk landscape, identifying it as a key factor in the state’s rising homeowners’ insurance costs.
The analysis follows recent flooding over the July 4th weekend in Texas Hill Country, which caused widespread damage in Kerr County. Only 2.5% of homeowners there had flood insurance through the National Flood Insurance Program, highlighting the gap between exposure and coverage, according to Triple-I’s Texas Issues Brief.
“The catastrophic flooding in Central Texas exemplifies a troubling trend we have seen with events like hurricanes Harvey, Ida, Ian and Helene – devastating flood damage occurring far from storm landfall,” said Patrick Schmid, chief insurance officer at Triple-I.
The report cites multiple risk drivers behind the state’s insurance affordability challenges. Texas leads the US in severe convective storms, with over 100 tornadoes annually and 878 hail events recorded in 2024. The state also ranks second in lightning-related homeowners’ insurance claims, with an average claim cost of $38,558 last year. Additionally, more than 244,000 homes in Texas face extreme wildfire risk, the third-highest nationally.
The 2021 winter storm, which triggered widespread power grid failures, continues to shape risk assessments, with 80% of insured losses from the event occurring in Texas.
As a result, Texas ranks as the sixth-least-affordable state for homeowners’ insurance, with premiums representing 3.13% of median household income. In contrast, personal auto insurance costs are relatively more affordable at 1.65%.
Schmid noted that improving property resilience is critical: “Insurance pricing must reflect risk. For Texas, reducing exposure through stronger homes and infrastructure is key to making insurance more affordable and protecting lives.”
Can infrastructure upgrades make insurance more affordable in Texas? Let us know what you think.
