Texas Home Insurance Costs Vs. Other US States


Texas Home Insurance Costs Vs. Other US States

The suburbs are often a first choice for homeowners who want to work in the city while maintaining a backyard and plenty of space.  But what are the Texas Home Insurance Costs to live in the suburbs?

As it turns out, you could pay up to three times as much for coverage than the owner of a comparable house in another suburb, depending on where you live.  Natural disaster risks, local building costs, and the area’s loss history have a lot to do with the cost.

The following areas were included in this study and rates are based on a 3 bedroom/2bath 2,000-square-foot brick home.  

10) Arlington (Dallas), Texas
Average Premium $1,761

Dallas’ suburbs  are the most expensive areas to insure a home in Texas, and in the US.  Why?  Because the Dallas area has experienced high property damage costs for the past 10 years ($1.601 billion in repairs) and ranks high in total FEMA declared disasters. In some areas, insurance premiums may be even higher because of the flood insurance requirements.

9) Lakewood (Denver), Colorado
Average Premium $1,379

Denver experiences something called the Denver Convergence Vorticity Zone, an area susceptible to tornadoes, high winds, and other extreme weather.

8) Highland Park (Chicago), Illinois
Average Premium $876

Highland Park experiences temperature swings and storms (wind, snow and ice that can be crippling in the winter) and they have high construction costs. For example a home in this area with a $352,000 replacement cost, would cost only about $250,000 to replace in another area. This has a huge impact on premiums.

7) Franklin (Nashville), Tennessee
Average Premium $844

FEMA has declared 16 natural disasters for the area in the past 10 years ($1.593 billion in property damage losses from thunderstorms, tornadoes, and other disasters). But local construction costs are lower than in other parts of the country, so the homes in the area don’t require as much dwelling coverage as they would in other cities.

6) Hudson (New York City), New York
Average Premium $837

Hudson experiences lower property damage costs and fewer total weather events. However, it also has the highest number of major disaster declarations by FEMA and some of the highest local construction costs.

5) Merion Station (Philadelphia), Pennsylvania
Average Premium $704

FEMA only declared 17 total disasters for Pennsylvania in the past 10 years and Pennsylvania typically sets low rates statewide. However, they do have relatively high construction costs which may counteract some of the low risks involved.

4) Alamo Heights (San Antonio), Texas
Average Premium $702

Texas typically has higher statewide rates because it is vulnerable to every major natural disaster: tornadoes, thunderstorms, hurricanes, wildfires, drought, and even earthquakes, causing property damage and with considerable insurance risk. However, Alamo Heights is one of the least expensive areas for home replacement costs.  This means homes in the area require less dwelling coverage, so rates are typically lower.

3) West Hollywood (Los Angeles), California
Average Premium $684

West Hollywood frequently experiences dry spells and droughts don’t generate many insurance claims. The Los Angeles area has only experienced nine natural disaster days with injury in the last 10 years. They do have high replacement costs compared with the same home in other cities (3 bedroom/2 bath 2000sf brick home: $388,000).

2) Chula Vista (San Diego), California
Average Premium $628

Chula Vista has a low frequency of major natural disaster declarations by FEMA, they have a low crime rate and Mediterranean-style weather. Residents might be required to purchase either earthquake or flood insurance or both, which will cause rates to increase.

1) Mesa (Phoenix), Arizona
Average Premium $555

Mesa is in the Sonoran Desert, so it’s hot but not as prone to violent storm damage. Of the states evaluated, Arizona had the lowest statewide rates. However, high winds, wildfires, and even floods can impact Arizona.  A standard home insurance policy excludes coverage for flood damage, so a separate flood insurance policy, may be required.  Mesa had a low number of major disasters and low insured losses, which help to keep the insurance rates down.

How does your suburb compare?  In general, if your area has a history of large insured losses, a high risk of natural disaster, and higher than average building costs, your premiums will be effected.

Rates change all time, based on natural disaster risks, local building costs, and your area’s loss history.  So you may save some money by comparing rates and reviewing your coverages on a regular basis.  Let one of our experts help.

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Data Sources:

1. Insured loss risk was tabulated from the Verisk Analytics ISO Property Claim Service Map. A rating of 1-10 was assigned based on the risk designations. http://www.verisk.com/property-claim-services/natural-disasters.html

2. Total recorded weather events from 1/1/04 to 1/1/14, 2014 NOAA National Climatic Data Center Storm Events. http://www.ncdc.noaa.gov/stormevents/

3. FEMA major disaster declarations from 1/1/04 to 1/1/14. http://www.fema.gov/disasters/grid/state-tribal-government

4. Total cost of property damage from 1/1/04 to 1/1/14: NOAA National Climatic Data Center Storm Events Database.  http://www.ncdc.noaa.gov/stormevents/

5. Total weather event days with personal injury or death from 1/1/04 to 1/1/14: NOAA

6. Dwelling Coverage (Coverage A) was calculated by comparative rater quoting tools, using one standard home size in each suburb analyzed. (3 bedroom/2 bath, 2000sf brick home)

7. Average premiums were compared with up to four carriers in each location by comparative rater quoting tools.