Apr 8, 2024 - Real Estate

Texas and Oklahoma have the highest home insurance costs in the U.S.

Average annual cost of homeowners insurance
Source: Reproduced from NerdWallet; Note: NerdWallet determined the average homeowners insurance cost by calculating the median rate for 40-year-old homeowners across various insurance providers in every ZIP code nationwide; Map: Axios Visuals

Home insurance premiums are on the rise nationwide, and Texas remains one of the states with the highest rates.

Why it matters: Homeowners have experienced major cost of living hikes because of rising property taxes, electricity bills and insurance premiums.

The big picture: Texas' effective rate change for owner-occupied homeowners insurance increased 23% in 2023, per S&P Global. It was the highest increase of any state.

  • Oklahoma and Texas now have the highest average home insurance costs in the country, more than double the national average, per a NerdWallet analysis.
  • U.S. home insurance rates are expected to reach a record high this year, per Bloomberg.

State of play: Texas' severe weather events have caused $402 billion in damages since 1980, more than any other state.

  • The losses have fueled an increase in insurance premiums as companies recoup payouts and anticipate upcoming expenses.
  • The average cost of $300,000 of dwelling coverage in Texas is $4,400, per NerdWallet. The national average is $1,915.

The intrigue: Our neighbors to the north pay an average of $5,500 for similar coverage — another reason to never live in Oklahoma.

How it works: Insurance companies set their rates based on anticipated payouts and have to get approval from state regulators before the hikes go into effect.

  • And because most policies have a 12-month term, policyholders don't immediately experience the effects of natural disasters.

Zoom in: In Dallas, the average annual cost of $300,000 of home insurance coverage is $5,045, per NerdWallet. In Fort Worth, the average annual cost is $5,335.

  • Houston's is even higher, at $6,610.

What's next: Insurance premiums may keep rising as climate change intensifies weather events, including wildfires and storms.

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