Since Insurers Have Left Texas, What Are Our Options for Coverage?
The Growing Insurance Crisis in Texas
Texas homeowners have recently faced growing challenges as several major insurance companies scale back operations or leave the state entirely. This shift has left many residents scrambling for new policies or dealing with higher premiums. The main reasons behind these departures include the rising cost of repairs, more frequent severe weather events such as hail and windstorms, and the growing expense of reinsurance. As a result, coverage options are shrinking, especially in high-risk areas, while deductibles and premiums continue to climb.
Exploring Private Insurance Options
When insurers withdraw from a market, homeowners are not left completely without options. The first step for most people is to explore other private carriers. While some large national companies have reduced their presence in Texas, many smaller or regional insurers still operate in the state. These companies often specialize in high-risk underwriting and can provide competitive coverage for homes that others consider difficult to insure. Working with an independent insurance agent or broker can make this process easier, as they have access to a wide range of insurers and can help compare rates and terms.
Turning to Surplus Lines for Coverage
Another option is to seek coverage through surplus lines, also known as non-admitted insurers. These companies operate outside the traditional regulatory system and are designed to take on higher-risk clients who cannot find coverage elsewhere. While surplus lines policies tend to cost more and may offer less standardized protection, they can provide a crucial safety net when standard insurers decline coverage.
The Texas FAIR Plan: A Last Resort
For those who cannot secure a policy on the open market, the Texas FAIR Plan serves as a last-resort option. This state-supported program offers basic property and liability insurance to homeowners who have been turned down by at least two insurers. Although it comes with higher costs and limited terms, it ensures that Texans are not left entirely unprotected.
Coastal Coverage Through TWIA
Coastal residents may also turn to the Texas Windstorm Insurance Association (TWIA), which offers coverage for wind and hail damage in designated coastal counties. Additionally, homeowners can make improvements to reduce their risk—such as reinforcing roofs, installing storm shutters, and maintaining their properties—to increase their chances of qualifying for standard insurance coverage.
Adapting to a Changing Market
While the insurance landscape in Texas is changing rapidly, understanding the available alternatives and taking proactive steps can help homeowners stay protected, even as the market adjusts to ongoing economic and environmental challenges.