Five Things to Know About
Texas Insurance Affordability
A one-page reference for legislators, staff, and policy advisors heading into the 90th Texas Legislative Session.
- 1
Texas has one of the most competitive insurance markets in the country — and competition protects consumers.
More companies competing for Texas policyholders means real choices on price, coverage, and service. That competition depends on a regulatory system that keeps insurers willing to write in Texas.
- 2
Texas insurers are operating near break-even in a high-risk state.
Over the latest five-year period, Texas homeowners insurers recorded a 99.3% combined ratio; over ten years, 100.6% — essentially break-even on underwriting before investment income. In 2021 (Winter Storm Uri), the combined ratio was 141.8%. Source: Texas Department of Insurance, Annual Statement data. Pure loss ratio alone does not tell the full story — combined loss ratio does.
- 3
Texas faces real risk, and real risk costs real money.
Severe weather, hail, hurricanes, winter storms, population growth, repair inflation, reinsurance, litigation, fraud, and auto costs all affect premiums.
- 4
Texas' file-and-use system balances oversight and competition.
Texas maintains active regulatory oversight while allowing the market to respond to changing risk. That balance helps protect consumers, preserve availability, and keep companies competing.
- 5
The path to affordability is reducing the cost of risk — not mandating a price that ignores it.
Mitigation, stronger homes, fraud reduction, litigation cost control, auto safety, theft prevention, and consumer shopping tools make the system work better. Arbitrary price mandates can make coverage scarcer.
Texas can lead the country on insurance affordability by reducing real cost drivers, keeping companies competing for consumers, and maintaining a market where coverage is both available and actuarially sound. The goal is not higher rates. The goal is a healthy market — one that works when Texans need it most.