The Inflation Rate in Texas Is Raising Home Insurance Rates


The pandemic, war in Europe, and political/economic turmoil are only a few of the major themes that have captivated Texans over the last several years. It has been far from boring and due to the uncertainty of the times, the inflation rate in Texas has been growing at a less than comfortable rate.

When there is a spike in inflation rates, there are always ramifications that ripple throughout economies year after year. The global economy and supply chain was turned completely on its head due to the pandemic and the effects are far from over. Inflation rates are increasing the cost of living and homeowners are feeling it through their home insurance rates.

Homeowners in Texas are already paying some of the highest homeowners insurance rates in the country as well as some of the top property taxes in the nation. While you can’t get out of paying Uncle Sam, you do have options for paying less on home insurance and counteracting some of the additional costs of inflation.

Why Is Inflation So High?

Pinpointing the exact reason for the increase in inflation rates is difficult under normal circumstances, and what’s been going on in the world lately has been anything but normal. There are plenty of factors that go into the global economy, but here are a few common inflation causes:

  • The supply chain disruptions are causing the cost of goods to rise.
  • Labor shortages and the rising cost of labor are increasing the amount you pay for goods and services.
  • The global disruption and increase in price for oil and gas due to the invasion of Ukraine.
  • Decisions by the Federal Reserve have rapidly increased the supply of money in America as part of their fight to save the economy during the COVID-19 pandemic.

2022 has seen some of the highest inflation rates in four decades with annual rates reaching as high as 8.5% in March and 8.3% in April. Inflation rates can be a vicious cycle. The global economy can send off a domino effect that begins on one side of the Earth and ends up affecting the local economy right in your backyard.

How Inflation Rates Raise Your Home Insurance Costs

Inflation touches virtually any industry and this includes insurance. Having home insurance is important and the job of your provider is to help you rebuild your home in the event of a loss. But in this arrangement, it can be easy for homeowners to forget that insurance carriers are indeed businesses that are affected by the same economic factors any other business may be facing.

Homeowners insurance will help you restore your home meaning that when you make a successful claim, your carrier will be helping you pay for labor and materials necessary to make your home whole again. The uptick in labor and building materials costs means that it will cost more to restore your home, thus, resulting in larger claims.

The increasing inflation rate in Texas and beyond is also coming during a period in which home insurance rates are already rising. When states and regions suffer from a massive amount of insurance claims due to natural disasters, you can expect insurance rates to rise as well. Texas is a great state but homeowners are exposed to a wide range of destructive weather events that can destroy their homes. Here are a few major examples that have played a part in rising homeowners insurance costs in recent years:

  • Winter Storm Uri.
  • Hurricane Harvey.
  • The Tax Day Flood of 2016.
  • Tornadoes and hail ravaged towns throughout Texas in 2022.
  • The Texas wildfires were responsible for destroying at least 80+ homes in 2022.

It doesn’t matter which area of the state you live in, you’re going to have serious weather events to contend with. Of the U.S. states most prone to natural disasters, Texas is the clear favorite. This is always a serious issue, but combined with high inflation rates, it can be a recipe for disaster for homeowners looking to save on their home insurance costs.

The Inflation Guard for Your Homeowners Insurance Policy

As inflation rises, so too does the prospect of you becoming underinsured. This means that if you submit a claim for a major loss, you might not receive enough money to restore the loss. All home insurance policies have limits for the amount they will cover. The costs of labor and materials will mean that you’ll have less room within your policy limits to operate.

It is a great idea to review your home insurance policy each year to account for such issues. Paying more in coverage is a much better solution than being caught underinsured during your time in need. Many homeowners insurance policies come with what is known as an inflation guard, which will automatically raise your coverage to an appropriate rate to keep you covered at the same level as you were the previous year before an inflation hike.

The Economy in Texas Is Not Immune to Inflation

The news about inflation isn’t good. Some experts believe that inflation will subside later this year, while others believe that it will take more time. We are still undergoing plenty of political and economical hurdles and the fact remains that inflation is going to be a factor in some form for quite some time.

Having a strong economy has not been enough to stave off the effects of inflation. The economy in Texas continues to provide a strong outlook and attract exciting companies, but there are still serious inflation concerns to be had. For example, studies show that North Texas is experiencing even higher inflation rates than the national average. Depending on your situation, you may need to either raise the home insurance policy limits you’ve set forth or shop around for new coverage.

How Homeowners in Texas Can Save Money Despite Inflation


As a homeowner, you have options. Saving money on your home insurance policy can be done in a variety of ways, and we’re here to help. Here are a couple of simple, yet effective ways, to save money on a homeowners insurance policy even in the face of high inflation:

  • Comparison shopping is always important, but even more so when inflation is high. You’re going to want to speak with a licensed agent who is trained to find the coverage you need across many different insurance brands. By doing so, you’ll be able to find the lowest rate on the market and the appropriate level of coverage so that you are not underinsured.
  • Bundling is a powerful tool homeowners have that can allow you to lower your bill and keep your protection. If you haven’t already, you’ll want to review any possible bundling possibilities that can help you save.
  • Discounts come in many shapes and forms. Changes happen and lifestyle changes can lead to lower rates. Maybe you’ve become an alumnus of a group that receives group rates that would better serve your interests or you’ve added security features to your home that can lower your rate. Again, speaking with an insurance agent to shop around your rates among different brands is a great way to find out how you can stay protected and save the most amount of money at the same time.

Searching among different insurance providers can take a lot of time, but it’s time that can return serious savings for your household. Freedom Insurance Group works with 25+ top-rated insurance carriers through our insurance center. Our established relationships allow us to quickly and accurately find the best possible home insurance coverage for our clients.

We’ve served homeowners across Texas since 2005, and understand the complex needs that Texans have for protection. Economic challenges are not new to us and our team of agents is ready to get you the best possible insurance coverage for the lowest rate on the market regardless of the inflation rate in Texas.

Get a free homeowners insurance quote or ask an agent how our clients save an average of 40% on their home insurance premiums.

Contact Us

Freedom Insurance Group
3861 Long Prairie Rd Ste 110
Flower Mound, TX 75028
Phone: (972) 798-3769


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