For many Texas homeowners, the annual insurance renewal has become a moment of unease.

A premium increase can mean hundreds — sometimes thousands — of additional dollars a year. For families in Fulshear, those increases matter well beyond the insurance bill itself. They can raise monthly housing costs, squeeze household budgets and make it harder to afford buying or keeping a home.

New research from Rice University’s Kinder Institute for Urban Research puts numbers behind what many Texas homeowners have already been feeling.

Between 2009 and 2024, the average homeowners insurance premium in the median Texas county increased 74% after adjusting for inflation, while median household income increased only 11%, according to the Kinder Institute report, The Insurance Squeeze: Rising Premiums, Affordability, and Income Inequality Across Texas Counties Since 2000.

That widening gap is making insurance an increasingly important part of Texas’ housing affordability story.

Insurance Is Taking a Bigger Bite Out of Household Budgets

In 2009, homeowners insurance represented about 2.93% of median household income in the typical Texas county.

By 2024, that figure had climbed to 4.65%. For households earning 80% of their county’s median household income, insurance premiums accounted for about 5.81% of household income.

The increases have accelerated in recent years.

Texas’ median homeowners insurance premium increased 18% from 2022 to 2023 and another 16.2% from 2023 to 2024 in nominal dollars. Even after adjusting for inflation, the increases were 13.4% and 12.9%, respectively.

The Kinder Institute analysis also found that approximately 7.04 million Texas households — about 64% of households statewide — could not afford the median-valued home in their county in 2024 when insurance and other housing expenses were included and affordability was measured using the commonly used threshold of spending no more than 30% of gross income on housing.

Researchers modeled how further insurance increases could deepen that pressure. A 4% increase in premiums could make a median-valued home unaffordable for an additional 20,077 Texas households, while a 10% increase could add nearly 49,900 households to that total.

Those figures are estimates, not predictions that a specific number of families will move or stop buying homes. They do, however, show how sensitive housing affordability has become to insurance costs.

Houston-Area Homeowners Are Already Feeling the Pressure

The Kinder Institute’s findings are especially relevant for residents in Fulshear because the Houston region already shows a sizable affordability gap.

For the Houston-Pasadena-The Woodlands metropolitan area, researchers calculated a 2024 homeownership affordability gap of approximately $86,065.

The analysis placed median household income at $82,168, median home value at $298,000 and average homeowners insurance premiums at $3,556 across the metro area.

The affordability gap represents the difference between what a household can reasonably afford under the study’s assumptions and the median home value in that market.

It does not mean every Houston-area household faces the same shortfall. Home values, household income, deductibles, taxes and insurance costs vary considerably from one property to another.

Still, the number helps explain why homeowners can feel financially squeezed even when home prices are no longer rising as quickly as they once did. The cost of owning a home is about more than the sale price or mortgage rate.

What Is Driving Higher Texas Home Insurance Costs?

There is no single cause behind rising homeowners insurance premiums.

The Kinder Institute report points to a combination of catastrophic weather, litigation patterns and broader structural cost pressures over time. It also notes major premium increases following severe Texas weather events, including Winter Storm Uri and Hurricane Beryl.

The Texas Department of Insurance has also documented the scale of weather-related losses in the state. TDI reported that Texas insurers paid $8.74 billion in homeowners insurance losses during 2025 involving wind and hail, water, fire, theft, liability and vandalism. The agency said wind and hail have accounted for an average 62% of Texas homeowners insurance losses since 2019.

Insurance prices can also vary based on rebuilding costs, a home’s location and characteristics, the amount and type of coverage purchased, deductibles and claims history.

That means two homes in the same general area can receive noticeably different quotes.

Rising Premiums Do Not Affect Every Household the Same Way

One of the Kinder Institute report’s more consequential findings involves income.

Researchers found that higher-income households were generally better positioned to absorb premium increases. In portions of the study period, homeownership continued to grow among households earning more than 120% of their county’s median household income despite higher insurance costs.

Lower- and moderate-income households showed more vulnerability.

For households earning up to 120% of median income, researchers found periods in which accelerating premium increases were significantly associated with declining homeownership rates. The report cautions that the pattern became less clear from 2019 through 2024 as pandemic-era migration, low mortgage rates and other housing-market forces affected homeownership trends.

The practical difference is easy to understand. A household with more disposable income may be able to absorb a large insurance increase without changing its housing plans. A family already stretching its budget may have fewer choices.

What Fulshear Homeowners Can Do

Homeowners cannot control statewide insurance trends, but they can take steps to make sure they are not paying more than necessary or carrying coverage they do not fully understand.

The Texas Department of Insurance recommends shopping around rather than automatically renewing the same policy each year. Consumers can compare companies, sample rates, complaint histories and financial information through HelpInsure.com, a resource operated by TDI and the Office of Public Insurance Counsel.

Homeowners should also ask insurers about available discounts, including those tied to security or fire alarm systems, bundling multiple policies or maintaining a claims-free record.

Changing the deductible may also reduce a premium, but that choice deserves careful consideration. A higher deductible means the homeowner will have to pay more out of pocket after a covered loss, so the savings only make sense if that amount would still be manageable in an emergency.

Coverage details matter just as much as price.

Homeowners should review whether their policy pays replacement cost or actual cash value. Replacement cost coverage generally pays based on the current cost to repair or replace damaged property, while actual cash value coverage accounts for depreciation and may leave the homeowner responsible for more of the repair bill.

Texas law does not require homeowners insurance, but mortgage lenders generally do require it while a loan is outstanding. Homeowners should also remember that standard homeowners policies generally do not cover flooding, which typically requires separate flood insurance.

Before switching insurers, TDI recommends confirming that the new company is licensed, reviewing its complaint record and making sure the replacement policy is active before canceling existing coverage.

Homeowners who have questions about a policy, insurer or complaint can contact the Texas Department of Insurance Help Line at 800-252-3439.

Insurance Is Becoming Part of the Homeownership Equation

The Kinder Institute for Urban Research, part of Rice University, studies housing, neighborhoods, affordability, resilience and other issues affecting communities across the Houston region and Texas. Its latest analysis uses Texas Department of Insurance data from 2000 through 2024 along with U.S. Census Bureau housing and demographic information across all 254 Texas counties.

The takeaway is not that insurance alone is driving Texas’ housing affordability problem.

Mortgage rates, home prices, property taxes, maintenance costs and household income all matter.

But insurance is taking up a larger share of that equation, and for homeowners in Fulshear, it is becoming increasingly difficult to treat it as a minor annual expense.

As insurance costs and the Texas housing market continue to change, My Neighborhood News will continue following developments that could affect homeowners, prospective buyers and neighborhood affordability across the region.

By Tiffany Krenek, My Neighborhood News 

Tiffany Krenek has been on the My Neighborhood News team since August 2021. She is passionate about curating and sharing content that enriches the lives of our readers in a personal, meaningful way. A loving mother and wife, Tiffany and her family live in the West Houston/Cypress region.