The Insurance Information Institute (Triple-I) released an analysis on July 14, 2025, highlighting the challenges facing Texas' property and casualty insurance market. The report reveals that Texas ranks as the sixth-least-affordable state for homeowners insurance due to its complex risk environment.
The recent flooding in Texas Hill Country during the Fourth of July weekend underscores the state's changing risk profile. This incident was attributed to moisture from Tropical Storm Barry and is part of a pattern of increasing inland flooding linked to tropical systems. Patrick Schmid, Triple-I's chief insurance officer, noted, "The catastrophic flooding in Central Texas exemplifies a troubling trend we have seen with events like hurricanes Harvey, Ida, Ian, and Helene – devastating flood damage occurring far from storm landfall."
Texas faces several natural catastrophe risks that drive up insurance costs. These include severe convective storms with over 100 tornadoes annually and numerous hail events; lightning and hail damage leading to significant claims; wildfire risks with many homes at extreme risk; and vulnerabilities in the power grid highlighted by past winter storms.
These factors contribute to affordability issues for homeowners in Texas. Homeowners spend an average of 3.13% of their median household income on insurance premiums. Schmid stated, "All insurance pricing needs to reflect the risk inherent in the coverage provided." He emphasized that improving resilience could help mitigate these costs.
For more information or interviews with Triple-I CEO Sean Kevelighan regarding the recent flood event, media inquiries can be directed to Mark Friedlander at MarkF@iii.org.
Since its founding in 1960, Triple-I has served as a resource for data-driven insights into risk and insurance matters. It represents diverse membership across various sectors within the U.S. property/casualty market.