TEXAS, USA — Central Texans are seeing increases in the cost of their home insurance policies. It's a trend that's happening across the country.
The national average cost of home insurance is $2,285 per year for a policy with a $300,000 dwelling limit, according to Bankrate. Bankrate reports the most expensive states for homeowners insurance are Nebraska, Florida and Oklahoma, while the least expensive states are Vermont, Delaware and New Hampshire. Texas' average annual premium is more than $1,000 more than the national average.
Kenneth Klein, a consumer representative to the National Association of Insurance Commissioners, in other words a home insurance expert, told 6 News that there are two main drivers of rising home insurance.
"The two major drivers are the intensity, frequency and consequences of weather events and the fast rising cost of labor and goods in home construction or reconstruction," Klein said.
There were several severe storms in Central Texas during Spring 2024, which most likely resulted in many filing claims with their insurance. Klein said that can likely draw prices of insurance up.
"All insurance is trying to model as precisely as possible what is the likelihood that they're going to be paying you personally money out under the insurance, and then make sure they've priced correctly," Klein explained. "They're interested anytime someone files a claim, it's not a guarantee that their premium is going to go up the next year, but it's pretty likely because that's a data point that ensuring you is more expensive than ensuring somebody who doesn't file claims."
If your home insurance has increased, Klein said there are a couple of steps you can take to try to lower the cost, but none of them are easy.
"You can raise your deductible, you can raise it pretty high and that'll make your insurance cost less because most people don't lose their home to a tornado or a hurricane or a fire, but pretty much everybody has a plumbing leak," Klein mentioned. "If your deductible is high enough that your insurance is no longer covering the little stuff, that'll drive your premium down. Second thing you can do is there are all sorts of other coverages you have other than just if my home is wiped out, I need to rebuild it and so you can have a conversation with your insurance company as to whether they will allow you to not purchase those other coverages or purchase less of them to the extent that your mortgage company and your insurance company will do it. You could also have a conversation about simply not fully covering a complete reconstruction of your home rather buying a little less coverage."
Klein's last tip is instead of calling a captive agent of an insurance company, you could call an independent broker or agent and start shopping to see if you can get insurance from a different company at a lower price.
Klein said you could also call the insurance company to see what things you can do to make your house more weather resilient. You should work out a deal with them that if you make the changes, your premium would be lowered. Klein provided an example of making a home more fire resilient.
The Texas Department of Insurance has an online shopping for home insurance checklist. You can access it here.