North Texas home insurance costs squeeze homeowners

Any gains North Texans receive from protesting their property taxes may be lost to growing home insurance costs that are stretching homeowners’ budgets and blunting the region’s affordability edge, real estate experts say. 

Among the largest U.S. metros, Dallas-Fort Worth now has the second highest number of homeowners with annual insurance premiums exceeding $4,000, according to a News analysis of the latest census data. The region has superseded cities such as New York, Houston or Los Angeles, cities more prone to flooding and wildfire risks. It is second only to Miami.  

Mortgage lenders require homebuyers to secure insurance policies before they complete a home loan.  

In April, home insurance costs made up about 15% of a homeowner’s mortgage payment in North Texas – double the national average – according to data from Realtor.com.  

In Tarrant County, insurance costs account for nearly 18% of total monthly mortgage payments.  

“One of the advantages of the D-FW metro is relatively affordable home prices compared to incomes,” said Joel Berner, senior economist at Realtor.com. “But when we add in this factor of high homeowners’ insurance, a lot of those advantages go away.” 

Many North Texas homebuyers are choosing to settle for less expensive homes than they initially planned so they can accommodate high insurance costs, said Nancy Garcia, a Monument Realty real estate agent working in the D-FW area since 2019.  

“Because insurance is taking up a larger portion, they cannot actually get a better home because the monthly payment is going to be that much higher.,” Garcia said.  

Insurance premiums are typically among the smaller parts of a monthly housing payment, and homeowners aren’t accustomed to focusing on that part of the breakdown, said Todd Luong, a ReMax real estate agent, who has worked in the North Texas region for 19 years.  

Home values, property taxes and insurance costs have all shot up in the region, he said, “So they just kind of see everything is going up.” 

Over the last five years, though, home insurance rates have increased in Texas, and especially in North Texas, at a faster rate than any other state, said Daniel Oney, director of research at the Texas Real Estate Research Center. “That doesn’t mean that we have the highest rates, but our rates have gone up more than other states,” he said.  

Between 2019 and 2024, when the average home insurance premium in the state rose 67%, it rose 105% in Collin, Dallas, Denton and Tarrant counties, according to a News analysis of data available from the Texas Department of Insurance.  

These additional homeownership costs tend to squeeze the most vulnerable homeowners first, Berner said.  

“People who were already stretching and scrimping and saving to make that monthly payment are the first people who are going to be affected when their insurance premium goes up year-to-year,” Berner said.  

Homeowner’s insurance is one of the top three concerns for Texas voters in the upcoming election, second only to healthcare costs, according to a 2025 voter poll by policy research group Texas 20×36.

Property tax relief was third. Nearly 80% of voters said they would support a candidate who would work to lower insurance costs. 

In the event of a natural disaster, the increasing cost of insurance emerged as a top concern for voters – more than the impact on community, damage to property or the possible loss of a home.  

Yet many first-time buyers don’t think about home insurance costs when they get ready to buy a home, said Matt Brannon, a senior economic analyst at Insurify.  

“They’re much more likely to have considered their property tax costs ahead of time,” he said,  

As a result, they are often shocked when they realize how much they’ll be paying to insure the home that they are buying. 

When buyers are ready to buy a home, they receive an estimated monthly payment amount from the lender, but with insurance costs now so high, the final amount catches many by surprise, said Garcia.  

“Once we go under contract with the home, when we get those insurance prices, the payment goes up $100 or $200 more, and sometimes buyers just cannot afford that,” she said.  

“They want to stay in a certain amount of payment every month.” 

Now lenders preemptively raise their estimates much higher, anticipating high insurance premiums for homebuyers, Garcia said.  

Ten years ago, you would never see these issues, Luong added. “Anytime you got an insurance quote for a home, it was pretty reasonable – but now it’s astronomically high.” 

Homeownership costs are also increasing — potentially — by way of higher deductibles for insurance. A deductible is the initial amount a homeowner pays before the insurance company covers the rest of a claim.  

In North Texas, several insurance companies have recently raised their standard deductible from 1% to 2%, said Jeff Breor, executive director of Independent Insurance Agents of Dallas.  

So for a D-FW home worth $500,000, the homeowner must bear the first $10,000 in costs for a claim.  

“That’s a homeownership cost as well,” said Breor. “Because now, if my hot water heater breaks, it costs us $4,000 worth of damage, and I’m paying that out of my pocket.” 

Brannon of Insurify said insurance companies raise deductibles to balance the risk of losses in a region like North Texas where all kinds of extreme weather, especially hailstorms, are now more common.  

The sheer growth of the North Texas region in number and size of homes, and a 40% increase in construction costs since 2020, have left insurance companies hard-pressed to balance the risk they face with the rates they charge.  

If the rates are too high, they may drive homeowners to other companies. If the rates are too low, they may struggle to pay out claims after a big weather event.  

“We’ve always had challenging weather,” Breor said, “But what used to be a cornfield in Celina is now a neighborhood with 20,000 homes in it.”.  

Homeowners are struggling, Garcia said, and to meet the rising costs of insurance, they’re starting to forego other expenses for self-care and enjoyment.

She said it’s common to hear them say, “I’m gonna cancel my gym membership, I’m gonna cancel my Netflix membership, I’m gonna cancel as many things as I can, because now I need to be able to afford the payment.”  

In an Insurify survey published this February, 28% of homeowners across the U.S. said they would drop their home insurance coverage if they could, while 45% wished they at least had the option to do so.  

When insurance premiums rise, homeowners have limited ways to respond, according to the authors of a recent report published by the Dallas Fed.  

Homeowners burdened by insurance costs are more likely to add credit card debt, become mortgage delinquent, and in some cases even lose their homes, threatening their broader financial stability. 

According to Oney, there has been anecdotal data to that effect. “And then when you start to synthesize the numbers, my opinion is that in the lower income brackets, insurance has been a reason for people not being able to stay in their homes,” he said.  

Berner of Realtor also stressed the need for homebuyers to fully consider the ancillary expenses of buying a home, including homeowner association fees, property taxes and insurance, and to build their budgets around it.  

“Keep these things in mind,” he said, “They make up a nontrivial part.”  

This reporting is part of the Future of North Texas, a community-funded journalism initiative supported by the Commit Partnership, Communities Foundation of Texas, The Dallas Foundation, the Dallas Mavericks, the Dallas Regional Chamber, Deedie Rose, Lisa and Charles Siegel, the McCune-Losinger Family Fund, The Meadows Foundation, the Perot Foundation, the United Way of Metropolitan Dallas and the University of Texas at Dallas. The News retains full editorial control of this coverage.