Homeowners insurance in Texas is becoming more confusing every year — rising construction costs, strict roof guidelines, and increasing wind & hail losses make it difficult for families to understand why rates range from $1,200-$5,000 per year.
As an independent agency, Aqua Tree Insurance helps homeowners compare multiple carriers and understand which coverage truly fits their home. If you’d like personalized help or want to see which companies offer the best rate for your property, you can click “Get Quote” on our website, fill out your information, and receive a customized quote from our team.
For a complete breakdown of Texas home insurance costs, roof rules, deductibles, and expert insights, read our full guide here: Homeowner Insurance in Texas – Full Guide
1. What is the average cost of homeowners insurance in Texas?
Most homeowners in Texas pay $1,200-$5,000 per year, depending on roof age, deductible, location, and credit score.
2. Why is homeowners insurance so expensive in Texas?
Texas has the highest wind and hail losses in the U.S., rising construction costs, increasing reinsurance costs, and stricter roof guidelines. These factors push rates up statewide.
3. Does Texas require homeowners insurance?
Not by state law, but lenders require it for any home with a mortgage.
4. What is the 80% rule in homeowners insurance?
You must insure your home to at least 80% of its replacement cost. If not, your claim payout can be reduced.
5. Why does my Coverage A increase every year?
Coverage A rises because construction labor, materials, and inflation continue to increase. Insurers update your rebuild cost to keep your home properly protected.
If you also own rental property, you can review the Landlord Insurance Texas Guide.
6. Why is my premium going up even without claims?
Statewide storm losses, reinsurance cost, labor/material inflation, roof age, and credit score changes all impact your rate, even when you have no claims.
7. Does roof age affect my insurance rate?
Yes. Many insurers limit or remove Replacement Cost (RCV) for roofs over 10-15 years, and some decline roofs older than 20-25 years.
8. What’s the difference between ACV and RCV for roof coverage?
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RCV (Replacement Cost Value): Pays to replace the roof without depreciation.
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ACV (Actual Cash Value): Deducts depreciation, meaning a smaller payout.
9. Does credit score affect homeowner insurance rates in Texas?
Yes. Texas allows credit-based insurance scoring. Poor credit can raise premiums 20-70%, and good credit can lower rates significantly.
10. How much dwelling coverage do I need?
You should insure your home based on rebuild cost, not sale price or appraisal value. Rebuild cost is usually higher.
11. Do I need flood insurance in Texas?
Yes, if you want flood protection. Homeowners insurance does not cover flood damage. Flood insurance is recommended even outside FEMA flood zones.
12. Why was my insurance application declined?
Common reasons include:
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Old or damaged roof
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Active leaks
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Prior claims
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Old electrical panels or wiring
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Missing siding or fascia
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High-risk animals
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Poor property condition
13. Can I change homeowners insurance anytime?
Yes. You can switch your homeowners insurance at any time.
If you paid your policy in full, most admitted carriers will issue a prorated refund based on the unused portion of the policy.
However, for surplus lines / E&S policies, many companies apply a 25% minimum earned premium, meaning the first 25% of the premium is non-refundable. If you cancel after the minimum earned portion is exceeded, the remaining time may be refunded on a prorated basis.
14. Do home insurance companies inspect the home?
Yes. Most companies perform drive-by inspections or external roof inspections shortly after binding.
15. Is foundation coverage included?
Not by default. Texas foundation coverage requires a special endorsement and may have specific limits.
16. Is mold damage covered?
Not automatically. Mold coverage must be added by endorsement and usually has strict limits.
17. Do I need water backup coverage?
Yes. Water backup (drains, sewers, sump pumps) is not included unless you add the endorsement.
18. What is Loss of Use coverage?
Loss of Use pays for temporary living expenses—such as hotel, food, and transportation—if your home becomes uninhabitable after a covered loss.
Landlords should review the DP3 guide here: https://aquatreeinsurance.com/2025/11/15/landlord-insurance-texas-guide-2026/
19. Is short-term rental (Airbnb/VRBO) covered under homeowners insurance?
No. You need a DP3 landlord policy or a short-term rental endorsement.
20. How can I reduce my home insurance premium in Texas?
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Replace or upgrade your roof
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Bundle home + auto
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Increase deductible (1% → 2%)
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Maintain good credit
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Ask whether your roof qualifies for RCV
Business owners can explore commercial protection here: https://aquatreeinsurance.com/business-insurance/coverages/small-business-insurance/
21. Can I insure a rental home with an HO3 policy?
No. Rental properties must be insured under a DP3 landlord policy.
22. Does homeowners insurance cover roof leaks?
Leaks caused by sudden, accidental damage (like hail) may be covered.
Wear and tear, old roofs, and maintenance issues are not covered.
23. Do I need business insurance if I run a business from home?
Possibly. Some home businesses require additional liability or commercial coverage depending on the type of work.
Learn more here: https://aquatreeinsurance.com/business-insurance/
