Texas Home Insurance Laws and Requirements
Texas does not require homeowners to carry insurance by law, but lenders and certain local conditions can make coverage essential. Understanding Texas-specific rules and common practices can help you choose the proper protection for your property.
No State-Mandated Home Insurance
Unlike auto insurance, Texas has no statewide law requiring homeowners' insurance. However, if you have a mortgage, your lender will almost always require coverage to protect their investment. This typically includes a standard homeowners policy covering fire, theft, wind, and certain types of water damage.
Lender Requirements
Mortgage lenders in Texas usually require you to maintain enough coverage to rebuild your home at current construction costs—known as replacement cost coverage. They may also require proof of insurance at closing and the right to purchase a policy on your behalf (and bill you for it) if coverage lapses.
Windstorm and Hail Coverage
In coastal counties and some parts of South Texas, wind and hail coverage may be excluded from standard policies. Homeowners in these areas often need separate coverage through the Texas Windstorm Insurance Association (TWIA). Without it, damage from hurricanes or strong coastal storms may not be covered.
Flood Insurance
Standard Texas homeowners' policies do not cover flooding from storm surge, heavy rain, or overflowing bodies of water. To protect against these risks, you must buy a separate flood insurance policy through the National Flood Insurance Program or a private insurer.
Consumer Protections Under Texas Law
The Texas Department of Insurance regulates insurance companies, sets claim-handling deadlines, and enforces consumer rights. For example, insurers must acknowledge receipt of your claim within 15 days and approve or deny it within a set timeframe, except in certain disaster situations.
Optional Coverages
Many Texas homeowners add optional endorsements like water backup coverage, extended replacement cost, or increased limits for valuables. These add ons can be important in areas prone to severe weather and property crimes.
Conclusion
While Texas law does not mandate homeowners' insurance, mortgage lenders and regional weather risks make coverage a necessity. Understanding state-specific rules—especially regarding windstorm, hail, and flood coverage—ensures your home and finances are fully protected.