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Texas is an attractive state for local and foreign real estate investors. It has a diverse economy, a growing job market, and relatively low taxes. In addition, the demand for housing is high.

Additionally, the Lone Star State is famous for its diverse landscapes, unique cowboy culture, delicious Tex-Mex cuisine, and friendliness.

However, when you live in Texas or buy a rental property there, you have to deal with many other things. While you'll enjoy warm temperatures and stunning clear skies during the summer, you'll also face several risks.

Like other states and territories, Texas experiences different natural events that can lead to major disasters, such as flooding, tornadoes, wildfires, hail storms, hurricanes, sinkholes, and more.

Fortunately, a comprehensive homeowners insurance policy can help protect your property and investment from these hazards, giving you the peace of mind you need to enjoy the wonders this beautiful state offers.

As there are multiple companies offering homeowners insurance in Texas, choosing one can be time-consuming and challenging. However, we'll make it easier!

After researching some of the best Texas homeowners insurance companies, we've created this guide on how to pick the right one. Let's explore the essentials, practical tips, and multiple options to choose a suitable policy. Read on!

Understanding Homeowners Insurance in Texas

The first thing we'll do is understand what this is all about by answering this common question ÔÇô What is homeowners insurance?

As the name implies, it's a type of insurance that provides financial protection to homeowners. These policies often cover damage to properties' structures and owners' belongings if caused by a covered event.

Each company sets its own rules and conditions, so policies often vary. Most cover common disasters, such as hurricanes, and thefts. However, many firms offer additional coverages for enhanced protection.

Is homeowners insurance required in Texas?

This is another common question we should answer to help you choose the right company and the ideal policy.

According to Texas laws, those who live or own a property in this state aren't required to have homeowners insurance. However, lenders may require you to purchase this type of policy if you still owe money on your home or rental unit.

Additionally, although it isn't legally required, Texas authorities advise residents to purchase homeowners insurance to protect their property, hard-earned money, and other assets.

With a homeowners insurance policy, you can be sure that you'll have the primary source of funds to rebuild or repair your home and replace your belongings if something unexpected happens.

Average Home Insurance Cost in Texas

When it comes to homeowners insurance in Texas, it's also important to consider costs. While you shouldn't choose a company or policy based solely on this aspect, you need an option that fits your budget.

This leads us to another essential question ÔÇô How much does homeowners insurance cost in Texas? Let's see what the latest figures show.

In this state, home insurance costs an average of $1,967 per $250,000 in dwelling coverage. Premiums are higher in Texas than in other states due to the likelihood of natural disasters.

These figures show that Texas residents pay around 38% more than homeowners in the rest of the country. The national average is $1,428 per year for the same amount of coverage.

Home insurance rates are often based on risks. If an area experiences frequent natural events that could damage properties, premiums are typically higher. That's what allows insurance companies to prepare for future claims payouts.

These are the cities with the most expensive home insurance premiums:

  • Hale Center
  • Richardson
  • Deer Park
  • Maryneal
  • Roby

However, many Texas cities offer cheap homeowners insurance premiums, including the following:

  • Lovelady
  • Purdon
  • Laneville
  • Huntington┬á
  • Salineno

Homeowners insurance costs vary based on different factors, such as the condition and age of the property. Here's a list of the elements that can affect these rates:

  • The age of the property
  • The condition of the property
  • The location of the property
  • The value of the property
  • Construction time
  • Coverage limits
  • Claims history
  • Security and safety features
  • State-specific requirements
  • Additional coverage options, such as flood insurance
  • Discounts

However, we highly recommend defining your needs and evaluating each option you find based on all variables. If you choose the policy with the cheapest premiums, you could be missing out on essential coverages.

Ideally, you should choose an insurance option that fits your budget but provides optimal protection for your property and investment.

Ask your insurance agent or company for more information about their policies, limitations, rules, conditions, and costs to make a smart decision!

Homeowners Insurance vs. Landlord Insurance

Before purchasing a policy, you should also understand the differences between homeowners insurance and landlord insurance.

A home insurance policy protects homeowners from loss and damage caused by covered events, such as natural disasters. This type of insurance often covers your property's structure and your belongings.

However, things are slightly different when you plan to rent out your property. In these cases, a homeowners insurance policy may not be enough to protect your rental unit and investment.

Rental property owners and managers should consider another type of coverage ÔÇô landlord insurance. Besides covering structural damage, it addresses the common risks most landlords face.

Also, a comprehensive landlord insurance policy includes liability coverage, which protects you from paying huge medical bills out of pocket if someone is injured on your property.

If you buy a homeowners insurance policy with liability coverage, you'll protect your guests. However, landlords are also responsible for the safety of tenants. Therefore, you'll need a policy that covers potential tenant-related risks if you plan to rent out your property.

In addition, a landlord insurance policy can protect your rental income if an unforeseen event affects your business. You won't get this type of coverage if you choose a home insurance option.

If you want to choose a suitable option, you should evaluate your particular situation and analyze each policy. More often than not, a rental property owner or manager can benefit from landlord insurance.

However, a homeowners insurance policy might be a better option in the following scenarios:

Vacant Property

Whether you're traveling to another city for work or just for vacations, there comes a time when you have to be away from home. However, not everyone is comfortable with renting out their properties.

If that's the case, a homeowners insurance policy can give you the protection you need while no one is living on your property. This type of insurance often covers both the structure and your belongings.

However, you should inform your insurance company about the vacancy. If your house will be unoccupied for a long time, your coverage could be affected.

Temporary Absence

What if you plan to be away from home for a while but want to make extra cash? Many people decide to rent out their properties to generate additional income.

However, you'll need protection against potential disasters or accidents, even if a tenant will be living on your property during this period. Therefore, you should consider purchasing a homeowners insurance policy.

It's crucial to inform your insurer about your plans. Also, you should make sure you have the right policy in place. If you plan to be away and rent out your property for a long period, you may need to switch to landlord insurance.

Transition Period

If you're still searching for the ideal tenant, you can live in your property while you conduct interviews and screen applicants until you find the right one. That's known as the "transition period."

In these cases, a homeowners insurance policy might be a better option. However, you should switch to landlord insurance as soon as the new tenant moves into your property.

Home Sharing

Many homeowners, especially those who own large houses, don't rent out their properties as a whole but just a room. However, these landlords decide to live there with tenants. Therefore, they need "home-sharing" coverage.

An insurance policy with home-sharing coverage is ideal for property owners who will share their dwellings with a person with whom they don't have a family or emotional relationship, such as tenants or roommates.

However, this type of coverage may fall short for landlords. Besides home-sharing insurance, rental property owners need liability insurance to pay for the medical bills of both tenants and guests if they're injured on their properties.

If you share your property with a tenant or roommate, you may also need coverage against potential loss of rental income caused by natural disasters and other risks.

How to Choose a Texas Homeowners Insurance Company

Although we've already learned many things, we should still consider several factors to choose the right home insurance policy. Let's start with the key needs of Texas residents.

Unique Policy Needs for Texas Homeowners Insurance

As mentioned, Texas experiences multiple natural events that can damage your property and other assets. These are the most common:

  • Flooding
  • Hurricanes
  • Wildfires
  • Hailstorms┬á
  • Tornadoes
  • Sinkholes┬á
  • Erosion
  • Drought┬á

Is there a way to protect your home or rental property and investment from these hazards?

Fortunately, a homeowners insurance policy can cover damages and losses caused by the events that often hit Texas. However, we should choose a comprehensive option.

Standard policies don't cover all common natural disasters, so you may need to purchase additional coverages.

These coverage options are essential if you want to make sure your Texas property is well-protected:

Flood Coverage

Although flooding is the most common natural disaster in Texas, most standard home insurance policies don't include this coverage. However, anyone living in this state should protect their home against rising waters.

Actually, you might even need to purchase a separate flood insurance policy from the National Flood Insurance Program (NFIP) if you live in a flood-risk area.

Whether you purchase additional coverage or a separate policy, flood insurance will give you peace of mind. You'll have optimal protection against damage caused by rising waters in a state where these disasters are quite common.

Hurricane Coverage

Hurricane insurance is essential in Texas, as its long coastline makes it vulnerable to hurricanes. Actually, it's the state with the second-highest number of landfills, only after Florida.

Many standard homeowners insurance policies include hurricane protection. However, you should ask your insurer or company for this information since each one is unique and covers different perils.

Hurricane insurance typically combines flood insurance and coverage against wind-related damage or losses. However, homeowners may need to pay a separate deductible for wind damage.

Since hurricanes are common in Texas, and these events cause extensive damage, this type of insurance is a must to protect both your property and your belongings. If you live in a designated coastal county, you can purchase this coverage from the Texas Windstorm Insurance Association.

Wind and Hail Damage

In Texas, standard policies often include coverage against hailstorms, which can wreak havoc on properties, especially on roofs.

This state has the highest number of hail-related insurance claims. That means hailstorms often cause extensive damage to Texas properties. That's why homeowners add this coverage to their policies.

If you're not sure if your existing policy covers hailstorm damage, ask your insurance agent or company for more information. You can also purchase this coverage from the Texas Windstorm Insurance Association if you're not able to get it from your insurer.

Tornado Coverage

Unfortunately, Texas is prone to tornadoes due to its unique geography. However, the damage caused by these events isn't usually covered by standard policies.

Therefore, coverage for tornado damage is a must to protect your property and investment. If your insurance company doesn't cover windstorms in your area, contact the Texas Windstorm Insurance Association and request information on available options.

Wildfire Coverage

Texas also reports many wildfires each year, but these events aren't covered by most standard policies. Fortunately, you can purchase additional coverage if you want to protect your property and belongings from wildfire damage.

If possible, you should also consider additional living expenses (ALE) to cover temporary housing costs if you're displaced from your home because of these events.

Sinkhole Coverage

This type of insurance provides financial support if your property or belongings are destroyed by a sinkhole or other earth movements.

Although this coverage isn't often included in standard policies, sinkholes are common in Texas. Therefore, you may need to purchase this additional insurance option to make sure your property is safe.

Other Factors to Consider When Assessing Texas Home Insurance Companies

Are you ready to choose the best Texas home insurance company? We've already mentioned the aspects that all property owners should consider before choosing a policy.

However, we should keep many other things in mind when choosing a reliable company to protect our home.

Here are a few tips to help you make an informed decision and make sure you're picking the best insurance provider.

  • Define your needs and priorities: Your homeowners insurance policy should adapt to what you need according to your objectives, your concerns, and state-specific risks. To choose the right company, list these factors and pick an option based on them.
  • Research multiple Texas home insurance companies: There are many companies offering homeowners insurance. If you already listed your needs, choose several firms, request information about each one, and pick an option with offerings that can address your priorities and concerns. Check their websites if you need more details.
  • Compare multiple coverage options: Since you're evaluating multiple home insurance companies, you'll also find many types of coverage and plans. Considering your needs and the common risks in your area, shortlist the options that can offer comprehensive protection to your property. Don't forget to check what each policy covers and excludes.
  • Consider your budget and request quotes: Although you shouldn't prioritize choosing the cheapest option, you should request quotes and cost information to pick the one that fits your budget. Choosing a comprehensive policy is essential, but you should make sure you can afford monthly or annual premiums.
  • Evaluate companies' financial strength and availability: AM Best and other independent rating agencies offer information on insurers' financial strength and availability. These details can help you know if a firm can make claims payouts.
  • Assess companies' customer service: If you evaluate the insurer's customer service, you'll be able to know if you'll get prompt solutions and recommendations when filing a claim or resolving any issue. Therefore, you should check online reviews from other policyholders to determine if the firm offers an optimal experience.
  • Ask about discounts: Many companies offer discounts for policyholders who want to save on their premiums. They vary based on different factors, such as properties' security features and homeowners' claims history. However, each insurer offers unique discounts that can lower your home insurance costs.
  • Seek recommendations from friends and family: Are you still looking for the best home insurance company? Did you have trouble finding a reputable insurer? Your loved ones and colleagues can help you choose the right option! Ask them for recommendations if they have already purchased their policies and consider their experiences to make a wise decision.
  • Review each policy in-depth: The last step in choosing the best home insurance company is to review each policy in detail. Request information about what each option includes and excludes, limits, conditions, costs, and any other factors that may help you determine if it's the right choice.

While there are many things to consider, and you should spend some time evaluating multiple options, these tips can help you choose the best Texas homeowners insurance company.

If you pick a reputable insurer, you'll get exceptional services, prompt assistance if there's an issue, comprehensive policies for optimal property protection, and reasonable costs.

Best Home Insurance Companies in Texas

Finally, it's time to review the best homeowners insurance companies in Texas! We've listed the top five providers in this state, including key information on their policies, additional coverage options, discounts, and more!

1) Chubb

Chubb

Founded in 1882, Chubb Corporation is a global insurance company offering policies to homeowners in the US and 53 other countries and regions. This firm has earned an A++ financial stability rating from AM Best. It's the highest rating given by this agency, which means the insurer can meet its claims obligations.

Chubb stands out from the competition because it offers comprehensive policies with coverage options that aren't usually included in standard plans. In addition, this company has its own flood insurance for those looking for an alternative to the NFIP.

Coverage and Features

This is what standard Chubb policies include:

  • Coverage for dwellings
  • Coverage for other structures, including pools and outbuildings
  • Coverage for belongings
  • Coverage for damage caused by smoke, fire, theft, and vandalism
  • Coverage for damage caused by bad weather, including wind, hail, and lightning
  • Guest medical and personal liability coverage
  • Loss of use insurance if covered perils force policyholders to temporarily relocate
  • Coverage for water backup (interior drains and sewers)

Also, Chubb offers these additional coverage options for those who want to customize their policies:

  • Earthquake coverage
  • Flood coverage
  • High-value items coverage

Discounts

Chubb also wants to help eligible policyholders save on their home insurance premiums by offering these discounts:

  • Multi-policy discount
  • Fire and security discount
  • New or renovated home discount
  • Claims-free discount
  • Backup generator discount

2) Amica 

Amica

Amica is a home insurance company with an excellent reputation in Texas and other states. It offers comprehensive policies with multiple coverage options in both standard and platinum plans.

In addition, AM Best has given Amica an A++ rating for financial strength and availability, which means you'll likely get a prompt response to your claims.

Coverage and Features

If you're interested in a home insurance policy from Amica, you can choose between two options.

Standard Choice:

  • Dwelling coverage
  • Coverage for other structures
  • Personal property insurance
  • Loss of use or additional living expense (ALE) coverage
  • Personal liability coverage

Platinum Choice:

  • Dwelling replacement cost
  • Personal property replacement
  • Extended coverage for valuable items
  • Extended coverage for liability and medical payment
  • Credit card coverage
  • Business property coverage
  • Loss assessment plan
  • Special computer coverage

In addition, this company offers dividend-paying policies. If you choose these options, you'll get a portion of your premiums back. Therefore, you can save a lot on your annual home insurance costs.

Discounts

Amica also has several discounts for eligible policyholders, including the following:

  • Multi-policy discount
  • Loyalty discount
  • Claims-free discount
  • Autopay discount
  • e-discount
  • Alarm system discount
  • New or remodeled home credit discount
  • Automatic detection devices discount

3) State Farm

State Farm

State Farm has also earned the highest rating for financial stability from AM Best (A++). That means this company has an excellent proven record of claims payouts. In addition, it offers many standard options with multiple add-ons for those seeking comprehensive protection for their properties.

Also, while it doesn't offer as many discounts as its main competitors, State Farm's premiums are cheap.

Coverage and Features

This is what a standard policy from State Farm includes:

  • Coverage for dwellings and attached structures
  • Coverage for other structures
  • Personal property coverage
  • Additional living expense (ALE) coverage
  • Medical payment coverage
  • Personal liability coverage
  • Replacement cost for properties, other structures, and belongings (optional)

Plus, you can customize your State Farm policies with the following add-ons:

  • Ordinance or law insurance
  • Inflation guard
  • Coverage for valuable possessions
  • Identity Restoration Coverage (IDR)
  • Cyber ÔÇőÔÇőEvent, Identity Restoration, and Fraud Loss Coverage (CEIDR)

Discounts

State Farm offers limited discounts compared to other companies on this list but has several options to help you save, including the following:

  • Multi-policy discount
  • Claims-free discounts
  • Roofing discounts
  • Home security discount
  • Automatic sprinkler discount
  • Utility rating plan discount

4) Allstate

Allstate

Allstate is another of the best homeowners insurance companies you can find in Texas. This insurer is committed to helping property owners make their homes and buildings more eco-friendly. Therefore, it offers a great insurance option to replace damaged or lost items with energy-efficient alternatives.

In addition, this company makes claims payouts on time. Allstate earned an A+ financial stability rating from AM Best.

Coverage and Features

This is what a standard home insurance policy from Allstate often covers:

  • Dwelling and attached structures
  • Guest medical bills
  • Lost or damaged belongings
  • Legal fees if someone is injured on policyholders' properties

If you want to customize your policy, you can choose one or more add-ons. Here are the options Allstate offers:

  • Flood insurance
  • HostAdvantage (home-sharing insurance)
  • Personal umbrella policy
  • Identity theft restoration
  • Water backup
  • Green improvement reimbursement
  • Yard and garden
  • Sports equipment
  • Business property
  • Scheduled personal property
  • Electronic data recovery
  • Musical instruments

Allstate also offers condo and renters' insurance coverage through separate policies.

Discounts

In addition, Allstate offers the following discounts to reduce home insurance costs:

  • Easy Pay Plan discount
  • Multi-policy discount
  • Protective device discount
  • Early signing discount
  • Homebuyer discount
  • Responsible payment discount
  • Welcome and loyalty discount

5) Farmers Insurance

Farmers Insurance

If you prioritize convenience and are looking for a modern business, Farmers can be a great option. Unlike competitors, this insurer allows policyholders to file claims online. You can also request quotes for home insurance options through the company's website.

In addition, Farmers offers comprehensive standard policies with multiple coverages to make sure your property is well-protected.

Coverage and Features

A standard Farmers policy often includes the following:

  • Dwelling coverage
  • Attached structure coverage
  • Personal property coverage
  • Liability coverage
  • Additional living expense (ALE) coverage
  • Medical payment coverage

Also, you can choose multiple add-ons to add extra protection to your home. These are:

  • Earthquake insurance
  • Flood insurance
  • Contents replacement cost coverage
  • Personal articles floater
  • Umbrella coverage
  • Identity theft coverage

Discounts

Farmers also has several discounts for policyholders who want to save on their premiums. These are:

  • Multi-policy discount
  • Good payer discount
  • Claim-free discount
  • Protective devices discount
  • Discount for green certifications
  • Rent-to-own discount

Other Notable Texas Home Insurance Companies

In addition to the options we listed above, other Texas home insurance companies offer excellent policies and benefits to homeowners. These are:

  • USAA (policies are only available to active military, veterans, and their families)
  • Progressive
  • Liberty Mutual
  • Lemonade
  • Nationwide

Conclusion

A comprehensive home insurance policy can give you the peace of mind you deserve by protecting your home or rental unit.

In Texas, many residents struggle with repair and replacement costs after a natural disaster damages their properties. Unfortunately, this is common due to the high likelihood of these events.

However, if you have a homeowners insurance policy with the right coverage options and add-ons, you'll be prepared to face the financial challenges if the unexpected occurs.

Therefore, you should pick the right company and make an informed decision when choosing your policy. Luckily, that's what you can do if you consider the key aspects and tips we shared here!

David is the co-founder & CMO of DoorLoop, a best-selling author, legal CLE speaker, and real estate investor. When he's not hanging with his three children, he's writing articles here!

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