Texas Homeowners Insurance Guide: Coverage, Costs, and State Requirements Explained

Is homeowners insurance required in Texas?

Texas law does not require you to buy homeowners insurance simply because you own a home.

If you have a mortgage, your lender will normally require insurance because the home is collateral for the loan. The Texas Department of Insurance says that once the loan is paid off, you can decide whether to keep the policy. Texas Department of Insurance

That does not make insurance unnecessary once the mortgage is gone. It means the financial decision becomes yours.

Ask yourself what it would cost to rebuild the house, replace your belongings, live somewhere else during major repairs, or respond to a serious liability claim. Those numbers are usually much larger than the annual cost of the policy.

What does a Texas homeowners policy usually cover?

Home insurance is not one single bucket of protection. A policy usually contains several types of coverage that do different jobs.

Dwelling coverage

Dwelling coverage protects the main structure of your home against losses covered by the policy.

The amount should be based on what it would cost to rebuild the house, not simply what you paid for it or what Zillow says the property is worth.

Market value includes things such as the land and local real estate demand. Rebuilding cost is about labor, materials, construction costs, and what it would take to rebuild the insured structure.

Other structures

Many policies include separate protection for structures that are not attached to the house, such as a detached garage, fence, or shed. Limits vary by policy.

Personal property

Personal property coverage protects belongings such as furniture, clothing, electronics, appliances, and other items you own, subject to the policy’s limits and exclusions.

Expensive jewelry, collections, artwork, firearms, or certain other high-value items may have special limits. If you own something unusually valuable, do not assume the standard personal property limit fully covers it.

Additional living expenses

If a covered loss makes your home unlivable, additional living expense coverage, often called ALE, can help with extra costs such as temporary housing and other expenses you would not normally have.

TDI notes that ALE has dollar limits, so it is worth knowing the amount available before you ever need it. Texas Department of Insurance

Personal liability

Liability coverage can help if you are legally responsible for certain injuries or property damage involving someone else.

For example, a serious injury on your property could create medical costs and a liability claim. Policy terms, exclusions, and limits matter, so do not treat the liability number on the declarations page as unlimited protection.

Medical payments to others

Many home policies also include a smaller amount of medical payments coverage for certain injuries to people who do not live in your household, regardless of whether you are legally liable. Check the policy for the actual limit and conditions.

What does homeowners insurance usually not cover in Texas?

One of the easiest insurance mistakes is assuming that “homeowners insurance” means anything that damages the home is covered.

It does not.

TDI lists several losses that standard home policies commonly exclude, including:

• flooding
• earthquakes or earth movement
• termites and other insects
• rats or mice
• wear and tear
• certain losses involving a home that has been vacant longer than the policy allows

Your exact exclusions depend on the policy. Texas Department of Insurance

This is why reading the exclusions is just as important as reading the coverage list.

Flood insurance is separate from most Texas home policies

Most homeowners insurance does not cover flooding.

That distinction matters because flood damage and water damage are not automatically the same thing in an insurance policy.

A burst pipe inside the home might be handled differently from rising water entering from outside. The cause of the water matters.

Flood insurance can be purchased through private insurers or, where available, through the National Flood Insurance Program.

TDI warns homeowners not to wait until a storm is coming because flood policies commonly have a waiting period before coverage begins. Texas Department of Insurance

Wind and hail coverage can be different near the Texas coast

Many Texas homeowners policies include wind and hail coverage, but coastal homeowners need to check more carefully.

TDI says that if you live along the Texas coast or in certain parts of Harris County near Galveston Bay, your regular home policy might not include wind and hail protection. Texas Department of Insurance

Eligible properties in designated coastal areas may be able to obtain wind and hail coverage through the Texas Windstorm Insurance Association, known as TWIA.

TWIA is not a replacement for a full homeowners policy. Its purpose is focused on wind and hail coverage for eligible properties in the designated catastrophe area. Texas Windstorm Insurance Association

If you live near the coast, ask a licensed professional to show you exactly where wind and hail coverage appears in your insurance arrangement instead of assuming it is included.

Your deductible can matter as much as your premium

A deductible is the amount of a covered claim that you are responsible for before the insurance company pays its portion.

Home insurance deductibles can be a fixed dollar amount or a percentage of the insured value of the home.

Percentage deductibles are easy to underestimate.

Suppose your home is insured for $400,000 and your wind and hail deductible is 2%. That deductible equals $8,000.

If a covered hail claim causes $7,000 of damage, the loss would be below that $8,000 deductible.

TDI specifically recommends translating percentage deductibles into actual dollar amounts before choosing a policy. Texas Department of Insurance

Replacement cost and actual cash value are not the same

This is one of the most important parts of a homeowners policy to understand.

Replacement cost coverage generally pays based on the current cost to repair or replace covered property, subject to the policy and deductible.

Actual cash value coverage generally subtracts depreciation for age and wear.

That difference can become very real after a roof claim. See our Texas roof claim payment comparison.

TDI gives an example of a $10,000 roof replacement. With replacement cost coverage and a $4,000 deductible, the example policy pays $6,000. With actual cash value coverage, an older roof can receive a much smaller payment after depreciation and the deductible are applied. Texas Department of Insurance

Do not ask only, “Do I have roof coverage?”

Ask:

• Is my roof covered at replacement cost or actual cash value?
• Does the amount change as the roof gets older?
• What deductible applies to wind and hail?
• Are there roof exclusions based on age, material, or condition?

Your roof can affect both eligibility and price

In Texas, the roof is not just something insurers think about after a storm.

TDI says insurers may inspect a roof when you apply for coverage and may charge more or refuse to insure the property based on its condition. Texas Department of Insurance

Roof age and material can also affect pricing. If you replace your roof, tell your insurer or agent so the information on the policy can be updated.

Some insurers may offer discounts for roofing materials designed to better resist wind, hail, or fire.

How much does homeowners insurance cost in Texas?

There is no single price that accurately predicts what a particular Texas homeowner will pay.

For context, the Texas Department of Insurance reported a preliminary statewide average annual homeowners premium of $3,506 for 2025. That is a statewide average, not a quote and not what every homeowner should expect to pay. Texas Department of Insurance

Your own premium can be much higher or lower.

Common pricing factors include:

• the age and condition of the home
• the age and material of the roof
• where the home is located
• replacement cost
• construction materials
• local fire protection
• your claims history
• coverage limits
• deductibles
• credit information, where allowed

TDI says companies use different underwriting rules and pricing formulas. That means one insurer can view the same house differently from another insurer. Texas Department of Insurance

Can Texas home insurers use your credit?

Many Texas home insurance companies use credit information as one factor in underwriting or pricing.

But there are limits. TDI says an insurance company cannot refuse to sell you a policy, cancel your policy, or refuse to renew it based only on your credit information. Texas Department of Insurance

Credit is only one part of the picture. Insurers may also look at your property, claims history, location, roof, rebuilding cost, and other factors.

Claims history can follow both you and the house

Insurance companies may review past claims when deciding whether to insure a home and how much to charge.

TDI says many insurers use CLUE reports, which can contain claims history for both people and properties. Texas Department of Insurance

That is useful to know when buying a home. A property can have an insurance history from before you owned it.

It also does not mean you should avoid calling your insurer with a question. Texas rules limit when companies can increase premiums for certain claims, and TDI says a company cannot charge you more simply because you called to ask about your policy or the claims process. Texas Department of Insurance

What if you cannot find regular homeowners insurance?

Some Texas homes can be difficult to insure because of condition, location, prior claims, or other underwriting issues.

The Texas FAIR Plan Association provides limited residential property coverage for eligible Texans who cannot obtain coverage in the regular market.

TDI says an applicant generally must have been denied coverage by at least two insurers licensed and actively writing residential property insurance in Texas and must not have received a valid offer of comparable coverage. Texas Department of Insurance

The FAIR Plan is a fallback option, not simply another standard homeowners insurer. Its coverage is limited, so homeowners should understand exactly what it includes.

What should you check before choosing a Texas homeowners policy?

Do not judge the policy by the premium alone.

• How much dwelling coverage do I have?
• Is that amount based on rebuilding cost rather than market value?
• Is the dwelling covered at replacement cost or actual cash value?
• How is my roof covered?
• What is my regular deductible?
• Is there a different wind or hail deductible?
• What does that percentage deductible equal in dollars?
• Is wind and hail included?
• Is flood excluded?
• How much personal property coverage do I have?
• Are valuable items subject to special limits?
• How much additional living expense coverage is available?
• What liability limit do I have?
• What exclusions should I know about?
• Have renovations or rising rebuilding costs made my limits outdated?

If the answer to any of these is unclear, ask the licensed professional to explain it in plain English.

What information should you have ready when requesting homeowners insurance?

You do not need to know every technical detail before you begin, but accurate property information helps.

You may be asked about:

• the property address
• the year the home was built
• square footage
• roof age and material
• construction type
• recent renovations
• heating, plumbing, and electrical systems
• security or safety features
• prior insurance
• previous claims
• mortgage information
• when you need coverage to begin

It also helps to create a home inventory. Photos, video, receipts, and a basic list of what you own can make a future personal property claim much easier to document.