Triple-I: Texas Home Insurance Market Impacted by Complex Mix of Natural Catastrophe Exposures

MALVERN, Pa.--(BUSINESS WIRE)--The Insurance Information Institute (Triple-I) today published an analysis of the property/casualty insurance landscape in Texas, revealing a complex risk environment that has contributed to the Lone Star State ranking as the sixth-least-affordable for homeowners insurance in the United States.

The devastating flooding that struck Texas Hill Country over the Fourth of July holiday weekend serves as a stark reminder of the state's evolving risk profile, according to Triple-I's new Texas Issues Brief. The flooding, caused by remnant moisture from Tropical Storm Barry, demonstrated how severe inland flooding related to tropical systems has become increasingly frequent and severe in recent years.

“The catastrophic flooding in Central Texas exemplifies a troubling trend we have seen with events like hurricanes Harvey, Ida, Ian and Helene – devastating flood damage occurring far from storm landfall,” said Patrick Schmid, Triple-I’s chief insurance officer. “In Kerr County, where the worst flooding occurred during the recent Hill Country disaster, only 2.5% of homeowners have flood insurance through the National Flood Insurance Program.”

Multiple Risk Factors Drive Insurance Costs

Texas faces an unprecedented combination of natural catastrophe risks:

Severe Convective Storms: Texas experiences over 100 tornadoes annually – the most of any state – with highest activity in the Panhandle and North Texas. The state also recorded 878 hail events involving stones one inch or larger in 2024, again leading the nation.

Lightning and Hail Damage: Texas recorded 4,369 homeowners' insurance lightning loss claims in 2024, second only to Florida, with an average cost per claim of $38,558 – significantly higher than Florida's $23,686 average.

Wildfire Risk: With 244,617 homes at risk for extreme wildfire, Texas ranks third nationally behind California and Colorado.

Grid Vulnerability: The February 2021 winter storm that caused catastrophic power grid failure across Texas and other states continues to influence the Lone Star State’s risk profile, with 80% of insured losses from that event occurring in Texas alone.

Affordability Crisis Deepens

These combined vulnerabilities have resulted in Texas homeowners paying an average of 3.13% of median household income for homeowners insurance, making it the sixth-least-affordable state nationally. Personal auto insurance in Texas is more affordable at 1.65% of median household income, ranking 14th nationally.

“All insurance pricing needs to reflect the risk inherent in the coverage provided,” Schmid explained. “For Texas homeowners, their poor affordability reflects the high levels of natural catastrophe risk – most notably, severe convective storms and hurricanes. Improving the resilience of homes, businesses and communities is essential to reduce the risk, improve affordability and save lives.”

Triple-I Media Statement

Read Triple-I’s media statement regarding the Texas Hill Country flood catastrophe.

Note to Media

For media inquiries regarding the Texas Hill Country flood event or to arrange interviews with Triple-I CEO Sean Kevelighan, please contact Mark Friedlander at [e-mail].

About the Insurance Information Institute (Triple-I)

Since 1960, the Insurance Information Institute (Triple-I) has been the trusted voice of risk and insurance, delivering unique, data-driven insights to educate, elevate and connect consumers, industry professionals, policymakers and the media. An affiliate of The Institutes, Triple-I represents a diverse membership accounting for nearly 50% of all U.S. property/casualty premiums written. Our members include mutual and stock companies, personal and commercial lines, primary insurers and reinsurers – serving regional, national and global markets.

About The Institutes

The Institutes® are a global not-for-profit comprising diverse affiliates that educate, elevate and connect people in the essential disciplines of risk management and insurance. Through products and services offered by The Institutes’ nearly 20 affiliated business units, people and organizations are empowered to help those in need with a focus on understanding, predicting and preventing losses to create a more resilient world.

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