Before making an offer on a new home, check insurance company rates in advance. Based on experience, I strongly recommend not waiting until just before closing, or you may not be able to close. As of May 28, 2024, Texas home insurance rates had increased by 54% since 2019, according to LendingTree. This is due to many factors:
- Severe weather: "volatile climate patterns and a history of winter storms in recent years."
- Rising house prices: "The state's economic growth has led to increased property values."
- Inflation: "Reinsuranace companies have suffered losses due to inflation and catastrophic events, and are raising their rates."
Texas is a "file and use" state, meaning that "insurance companies can request rate increases and start charging them before the state department of insurance reviews them. This allows companies to respond more quickly to market conditions."
In a nutshell, it pays to know approximately how much insurance will cost BEFORE you go under contract for a new or pre-existing home. For example, because of state-wide and national catastrophic insurance claims, insurance premiums may increase substanially. Depending on the insurance company, high claim volumes and losses, catastrophic claims can lead to consequences in other states too. Always do your due dilligence. Do your homework and research before you buy. Depending on insurance companies and locations, rates may vary. If you have home insurance, and even if you're not planning to sell, contact your insurance company to find out what you can expect before your next premium is due. It does pay to shop around.
Sources: LendingTree.com. Texas Department of Insurance (800) 252-3439. Skyrocketing Texas Home Insurance is something to read. TDI - The Texas Department of Insurance has timely information and helpful graphs for quick visuals.
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