Losing Coverage in Texas
Market Withdrawals and Restricted Underwriting
Many insurers have scaled back or exited the Texas market. Farmers Insurance stopped issuing most new home policies in 2023, and Foremost ceased issuing new policies just before Hurricane Beryl. Nationwide and Liberty Mutual have significantly limited their underwriting in high-risk areas like coastal counties. Progressive has sharply reduced its property presence, limiting new business to bundled customers only.
These constraints go beyond homeowners' insurance; commercial policies are also affected. Three major insurers have exited Texas in 2025 alone, affecting thousands of businesses. Simultaneously, coverage-specific restrictions, such as ceasing mobile‑home or flood-related policies, are becoming more common.
Premium Hikes and Reduced Capacity
Businesses in coastal and high‑risk areas are experiencing premium increases ranging from 20 % to 50 %, with some cases of renewal hikes up to 400 %, even for customers without claims. Insurers are reacting to rising natural catastrophe losses, inflation, labor and material costs, and social inflation (costlier litigation and larger jury awards).
Meanwhile, many carriers raise deductibles—particularly for wind, hail, and flood—to mitigate exposure. In higher-risk zones, coverage limits are tightened, and fewer companies are willing to write new policies, leaving businesses with limited options.
Insurance Gaps: Business and Liability Coverage
Aside from property insurance, businesses face blind spots in other coverage areas:
- Directors & Officers (D&O) policies may contain exclusions for insider claims or investigation costs, with outdated limits that can fail during litigation.
- Business Interruption policies often exclude supplier failures or misaligned restoration periods, leaving businesses exposed during complex disruptions.
- Employment Practices (EPLI) plans may omit wage, hour, or emotional distress claims, which can result in hefty individual and corporate liability.
- Cyber insurance often limits coverage for social engineering fraud, ransomware payments, and cloud-provider incidents, despite these posing increasing threats to Texas companies.
These coverage design issues can leave businesses exposed even when insured.
Insurer‑of‑Last‑Resort and Surplus Markets
As private coverage retreat continues, more businesses are pushed into Texas Fair Plan or surplus lines, which offer higher-cost, less-regulated policies and serve as insurer-of-last-resort. Surplus lines premiums often run 40–100% above standard rates, and fair-plan capacity is limited, raising the risk of collective assessments under storm-prone scenarios.
Why It's Happening: Risks & Regulatory Pressures
Texas's increasing frequency and severity of hurricanes, tornadoes, floods, and hailstorms have made underwriting property and business risks sharply less attractive. The Texas Windstorm Insurance Association (TWIA) now faces rate inadequacy and reserve depletion, pushing risk onto policyholders via assessments.
Social inflation, catastrophic loss patterns, and pressure on reinsurance prices compound the issue. Insurers are being more selective in Texas to protect their balance sheets.
Conclusion
Yes, many Texas businesses are experiencing reduced insurance options, higher premiums, tighter underwriting, and potential coverage gaps. Coastal and disaster-prone regions are especially affected. As traditional markets shrink, businesses often face trade-offs: accept limited, high-cost alternatives like FAIR or surplus lines, or go underinsured. For executives and brokers, it's critical to review policies, explore available options, and consider mitigation strategies to retain operational protection in this evolving insurance landscape.