Moving to Texas or just wondering why your insurance is different here? Call Schell Insurance at (972) 423-4546 and we’ll explain what makes Texas insurance special.
Texas does everything bigger, right? Including insurance headaches.
Been here your whole life? You probably don’t realize how weird Texas insurance is compared to other states.
Moving here from somewhere else? You’re in for some surprises.
“Why is my car insurance so expensive?” “What’s this percentage deductible thing?” “Why do I need separate windstorm coverage?”
All good questions. All uniquely Texas problems.
We’ve been dealing with Texas insurance laws since before there were that many laws to deal with. Over 95 years of watching this state make up its own rules about insurance.
Here’s what makes texas home insurance requirements and everything else about insurance different in the Lone Star State.
Car Insurance – Texas Style
No-Fault? Not Here
Some states have “no-fault” car insurance. Not Texas.
Here, somebody’s always at fault in an accident. That person’s insurance pays. Simple in theory, messy in practice.
What’s that mean for you? Better hope the other guy has good insurance. About 20% of Texas drivers don’t have insurance at all.
That’s why uninsured motorist coverage matters so much here. Not required, but you’d be crazy not to have it.
Credit Scores Count
Texas lets insurance companies use your credit score to set car insurance rates. Good credit, lower rates. Bad credit, higher rates.
“That’s not fair! My driving has nothing to do with my credit!”
Tell that to the insurance companies. They’ve figured out people with good credit file fewer claims. Don’t ask us why.
Minimum Coverage Is a Joke
Texas requires $30,000 per person, $60,000 per accident, $25,000 property damage.
Know what a decent pickup truck costs now? $50,000. Know what an ER visit costs? $20,000 easy.
Those minimums might’ve made sense in 1975. Now they’re laughable.
Smart people carry way more than minimums.
Homeowners Insurance Chaos
Wind and Hail – Sometimes
Most of Texas gets wind and hail coverage automatically with homeowners insurance. But not everywhere.
Live along the coast? You might need special windstorm coverage through TWIA (Texas Windstorm Insurance Association).
Live in certain parts of Harris County? Same deal.
Everywhere else? Wind and hail are included, but companies are getting sneaky about how they pay claims.
Percentage Deductibles
This one surprises people from other states.
Instead of a flat $1,000 deductible, many Texas policies have percentage deductibles for wind and hail. Usually 1% to 5% of your dwelling coverage.
House insured for $400,000 with a 2% wind/hail deductible? You pay the first $8,000 of storm damage.
Surprise!
Roof Age Matters
Insurance companies in Texas are obsessed with roof age. Roof over 15 years old? Many companies won’t give you full replacement cost coverage.
They’ll depreciate claims based on the roof’s age. 20-year-old roof gets totaled by hail? You might only get 50% of replacement cost.
Other states don’t do this nearly as much.
The FAIR Plan
Can’t get regular homeowners insurance? Texas has a FAIR Plan that provides basic coverage.
It’s expensive and limited, but it’s there. Last resort for high-risk properties.
Most people never need it, but good to know it exists.
The Coastal Zone Nightmare
TWIA Territory
Live along the Gulf Coast? Welcome to TWIA territory.
Texas Windstorm Insurance Association provides wind and hail coverage for coastal areas. Regular homeowners insurance in these areas excludes wind damage.
TWIA coverage is expensive and has strict rules. But it’s often the only option for wind coverage.
Flood Requirements
Coastal areas also deal with flood requirements. Lenders often require flood insurance for coastal properties.
Flood insurance is federal, so it’s the same everywhere. But coastal Texas properties pay more because they’re higher risk.
Building Codes
Coastal building codes are stricter. Houses have to withstand higher wind speeds.
Insurance companies give discounts for storm-resistant construction. But the building requirements add cost upfront.
Tornado Alley Issues
Hail Frequency
North Texas sits in “Hail Alley.” We get pounded by hailstorms regularly.
Insurance companies know this. That’s why they’re getting picky about roof coverage and using percentage deductibles.
Some companies won’t write new business in certain ZIP codes because of hail frequency.
Storm Chasing Contractors
After every major hailstorm, out-of-state contractors show up promising to “work with your insurance.”
Be careful. Some are legit. Others are scams looking to take advantage of storm damage.
Claim Frequency
Texas leads the nation in weather-related insurance claims. That drives up everyone’s rates.
Even if you never file a claim, you’re paying for all the claims filed by your neighbors.
Legal Weirdness
Prompt Payment Laws
Texas has strict laws about how fast insurance companies have to pay claims.
Generally 15 days to acknowledge, 15 days to start investigating, 5 days to pay after reaching settlement.
Companies that drag their feet face penalties. Good for consumers.
Attorney Fees
Texas law says if you sue your insurance company and win, they have to pay your attorney fees.
This encourages lawyers to take insurance cases. Also encourages insurance companies to settle rather than fight.
Appraisal Process
Texas has a special “appraisal” process for disputes about claim amounts.
Instead of going to court, both sides hire appraisers. If they can’t agree, they hire an umpire to decide.
Faster and cheaper than lawsuits usually.
Business Insurance Quirks
Workers’ Comp Not Required
Most states require businesses to carry workers’ compensation insurance. Not Texas.
Texas businesses can “opt out” of the workers’ comp system. But that means employees can sue for workplace injuries.
Most smart businesses carry workers’ comp anyway. Lawsuits are expensive even when you win.
Professional Liability
Texas has specific rules about professional liability for certain professions.
Lawyers, doctors, architects, engineers – all have different requirements and regulations.
Commercial Auto
Texas commercial auto insurance has some unique requirements, especially for trucking companies.
Federal regulations plus state requirements make commercial auto complicated here.
Health Insurance Complexity
No State Exchange
Texas uses the federal health insurance marketplace. No state-run exchange.
Fewer plan options than some states. Higher prices than some states.
Limited Medicaid
Texas has restrictive Medicaid eligibility. Many low-income adults don’t qualify.
This affects the private insurance market because uncompensated care costs get shifted to insured people.
Association Plans
Texas allows association health plans for small businesses and individuals.
Can be cheaper than marketplace plans but often have less coverage.
Life Insurance Rules
Community Property
Texas is a community property state. That affects life insurance in marriage.
Spouses automatically have rights to certain life insurance benefits, even if they’re not named beneficiaries.
Makes estate planning more complicated.
Viatical Settlements
Texas regulates viatical settlements (selling life insurance policies to third parties).
Stricter rules than some states to protect consumers from predatory practices.
Unique Weather Risks
Hurricane Season
Even inland Texas gets affected by hurricanes. Flooding, power outages, wind damage.
Homeowners insurance covers wind damage but not flooding. You need separate flood coverage.
Drought and Wildfires
West Texas deals with drought and wildfire risks. Insurance companies factor this into rates.
Some areas are hard to insure due to wildfire risk.
Extreme Heat
Texas heat affects everything. Roofs age faster. AC units work harder. Higher maintenance costs.
Insurance companies know Texas roofs don’t last as long as roofs in cooler climates.
Moving to Texas
Rate Differences
Car insurance rates vary dramatically between states. Texas isn’t the cheapest.
Urban areas like Dallas and Houston have higher rates due to traffic and crime.
Rural areas have lower rates but fewer agent options.
Coverage Requirements
What you needed in your old state might not be enough in Texas.
Higher liability limits recommended due to lawsuit-friendly environment.
Different natural disaster risks require different coverage.
Finding Agents
Independent agents usually offer more options than captive agents.
Look for agents who understand Texas-specific issues.
Don’t just go with the cheapest option. Service matters when you file claims.
Regional Differences Within Texas
North Texas
Hail and tornado risks. Higher property values in places like Plano and Frisco.
Good municipal services usually mean lower insurance rates.
South Texas
Hurricane and flood risks. Different building requirements.
Border areas have unique security considerations.
West Texas
Wildfire and drought risks. Fewer insurance company options.
Longer distances to repair services after claims.
East Texas
Flood risks from rivers and heavy rains. Different soil conditions affect foundations.
More trees mean more potential for wind damage.
Why Texas Insurance Costs More
Weather
We get everything. Hail, tornadoes, hurricanes, floods, extreme heat.
Weather-related claims drive up costs for everyone.
Litigation
Texas courts are generally friendly to insurance claimants.
Higher lawsuit awards mean higher insurance costs.
Population Growth
Rapid population growth strains infrastructure.
More people means more claims. More claims mean higher rates.
Construction Costs
Building materials and labor cost more due to demand.
Higher rebuilding costs mean higher insurance premiums.
Working With Texas Insurance
Know Your Agent
Texas insurance is complicated. You need an agent who understands state-specific issues.
Independent agents usually have more options and flexibility.
Read Your Policies
Texas policies have unique provisions. Don’t assume coverage is the same as other states.
Pay attention to deductibles, especially percentage deductibles.
Plan for Weather
Keep emergency supplies. Know your claim procedures. Have contractor contacts ready.
Weather damage is when, not if, in Texas.
Review Annually
Texas insurance laws change. Your needs change. Coverage should change too.
Annual reviews help catch problems before they become expensive.
How Schell Handles Texas Insurance
We’ve been dealing with Texas insurance peculiarities for over 95 years.
We know which companies handle claims fairly. We know which ones try to lowball storm damage.
We understand local weather patterns and building practices. We know what coverage actually works in North Texas.
When the next hailstorm hits, we know which adjusters will be overwhelmed and which contractors do good work.
That local knowledge makes a difference when you need it most.
We represent multiple companies, so we can find options that work for your specific situation and location.
Most importantly, we explain Texas insurance in plain English. No confusing legal language or hidden surprises.
Confused about Texas insurance rules? Wondering why your coverage is different from other states? Call Schell Insurance at (972) 423-4546. We’ve been navigating Texas insurance laws for over 95 years. Let us explain what makes Texas unique and make sure your coverage actually works here. No surprises, no confusion, just straight answers about Texas insurance.