Texas High Uninsured Homeowners Rate
Widespread Lack of Coverage in the Lone Star State
Yes, Texas has one of the highest rates of uninsured homeowners in the country. While homeowners' insurance is not legally required in Texas, it is generally mandated by mortgage lenders. However, many residents who own their homes outright choose to forgo insurance, especially in rural or low-income areas. According to recent housing and insurance data, nearly 9.5% of homeowners in Texas are uninsured, placing the state well above the national average. In certain parts of the state—particularly along the Gulf Coast and in the Rio Grande Valley—the uninsured rate climbs even higher, with some communities reporting rates as high as 40%.
Why So Many Texans Are Going Uninsured
This high rate of uninsurance is driven by several factors. Affordability is one of the most pressing issues. Texas frequently ranks among the most expensive states for homeowners' insurance due to the prevalence of severe weather events like hurricanes, hailstorms, and floods. In 2023 alone, average premium rates increased by more than 20%, and in some areas, by as much as 40% by 2025. These steep costs lead some homeowners, particularly retirees or those living on fixed incomes, to take the risk of going without coverage. When faced with the choice between paying their bills and their insurance, many opt to self-insure, hoping a major disaster won't strike.
Insurance Availability Is Shrinking
The removal or restriction of large insurers from specific Texas markets is another factor that contributes to the high incidence of uninsured people. Comprehensive coverage is becoming less accessible in coastal and storm-prone areas. Some homeowners have dropped coverage completely as a result of this trend, forcing others into surplus lines or state-run last-resort plans, which are sometimes costly and provide few safeguards. Furthermore, a different but connected issue is the poor uptake of flood insurance. Only 7% of Texas households get flood insurance, despite the fact that urbanization and storms are increasing the risk of flooding. Millions of people are at risk of catastrophic loss since coverage rates in some inland areas are less than 1%.
The Price of Not Having Protection
Being uninsured has serious repercussions. Uninsured homeowners are responsible for paying for all repairs and replacements after a fire, storm, or other calamity, frequently without the use of financial aid or recovery grants. Even little property damage might have disastrous financial consequences if insurance is not obtained. Texas is facing an increasing underinsurance crisis that jeopardizes the long-term health of its housing market and economic resiliency as weather disasters and premiums continue to climb.