The 5 Best Texas Homeowners Insurance Companies

You know what they say: Everything’s bigger in Texas, even the weather. With four major geographic regions in one state, Texas homeowners can encounter everything from hurricanes on the coast to tornadoes in the plains — and hail storms in between. The best homeowners insurance in Texas has to be robust enough to cover everything from smaller hail damage claims to major disasters without leaving homeowners scrambling to cover costs themselves.

The premium payments might be a little bigger too. Texas consistently hits the top rankings for the highest premiums in the nation. The state currently ranks as the third highest— trailing behind Louisiana and Florida — with HO3 premiums (the most widely available policy) running $1,837 per year on average, according to the National Association of Insurance Commissioners. But that is just the average. Homeowners insurance premiums depend on a multitude of factors, and living in the same area, or having the same size house, or even the same policy as someone else doesn’t mean you’ll pay the exact same amount. It is complicated, and the best way to tell what your premiums will be is by getting a quote.

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To find the best options, we evaluated the five biggest insurance providers in Texas (based on market share) following a similar methodology used in our nationwide homeowners insurance review. We paid close attention to what matters most to homeowners, evaluating each company’s policy offerings, what endorsements homeowners can add, and what discounts you might receive to knock those higher-than-average premiums down. We used J.D. Power and Associates’ rankings and Consumer Reports’ reader reviews to see who handled the all-important claims process best, and we looked at financial strength through third-party rating systems like Standard & Poor’s and A.M. Best. We even evaluated the usefulness of their apps and requested a quote ourselves.

Texas Homeowners Insurance Reviews

Allstate

Allstate impressed us in almost all categories during our evaluation, and when it came to online knowledge centers, it couldn’t be beat. The company offers nearly everything we were looking for: a virtual library of insurance and homeownership-related educational materials, step-by-step claims information, and a list of the most common costly claims. Allstate offers more endorsements than any other provider we evaluated, including everything from sudden and accidental water discharge, to extended replacement costs for times when repairs are more expensive than what you planned (such as after a natural disaster when the cost of materials can skyrocket), to identity theft coverage.

That said, in customer and professional rankings, it doesn’t fare as well as others. Allstate received the lowest Consumer Reports reader ranking — 77 compared to USAA’s high of 92 — but it did receive the second-highest rank for timely claims payment out of the five providers we reviewed. So while day-to-day customer service might not be exceptional, Allstate has a proven track record of responding quickly to claims. If disaster does strike your homestead, you’ll be able to get on with your life sooner rather than later.

USAA

Only available to current and former military members and their families, USAA received the highest marks on customer satisfaction and professional ranking surveys. The company is the only provider we evaluated that scored higher than average on Consumer Reports’ reader rankings for claims experience and scored the highest on timely payments. The company also ranks the highest on financial stability receiving an A++ from A.M. Best and a AA+ from Standard & Poor’s, just barely beating out State Farm’s AA rating.

Granted, its website leaves something to be desired. While there is a trove of helpful calculators and tools geared toward homeownership, the homeowners insurance sections merely felt like space fillers. But a great website isn’t everything. With a reputation as good as USAA’s, it is worth getting a quote if you qualify.

Farmers Insurance

Farmers claims to offer “dozens of discounts to save you hundreds,” and it does offer more discounts than any other provider — nearly twice as many as State Farm. Discounts include perks for newly remodeled homes, professional associations, and smoke-free families, so there is something for everyone. But we were surprised some common discounts (like the early shopper, which is designed for those buying before their current policy is up, and new customer welcome discounts offered by Allstate) didn’t make the list. The company’s website has basic information, but lacks an impressive knowledge center or a live chat function. When it comes to customer satisfaction, Farmers has an average ranking with J.D. Power, scoring 3 out of 5 on overall satisfaction and the claims process.

State Farm

State Farm ranked the second highest on Consumer Reports’ reader reviews, scoring an 82 out of 100, and received a great 4 out of 5 mark from J.D. Power for its claim process ranking. It also writes more homeowners insurance policies than any carrier in the nation, which we found out during our nationwide homeowners insurance review.

But the company offers fewer discounts than Allstate or Farmers, and the endorsements options lack extended replacement costs and inflation guard, which can protect you from being drastically underinsured if your home’s value increases. That said, State Farm does offer the lowest deductible options, including 0.5 percent for wind and hail claims, which are common in Texas.

Liberty Mutual

Liberty Mutual offers inflation guard and some other key endorsements like extended replacement costs, but its options just aren’t as robust as Allstate’s or State Farm’s. The company offers fewer deductions than Farmers, Allstate, and State Farm, but does include some key discounts like one for newly purchased homes and breaks for installing security features like smoke alarms and sprinkler systems. Liberty Mutual ranked third out of the top five providers on Consumer Reports reader reviews, scoring 80 for overall satisfaction.

Interestingly, the company ranks the lowest out of the five on financial security, only hitting an A rating with A.M. Best and a BBB with Standard & Poor’s. While that may never affect customers — and Liberty Mutual’s customer satisfaction ratings prove its track record of reliability — a lower financial ranking could mean the company isn’t as financially solvent as some of the other providers we evaluated, and that could be a problem if your home is involved in a widespread disaster and Liberty Mutual needs to pay out a large number of claims at once.

Did You Know?

Most weather woes are covered by your homeowners insurance — but you still might not want to file a claim.

Texas residents are no strangers to unusual and often severe weather patterns. The majority of the state experiences tornadoes, ranging from mild damage to complete devastation, while coastal areas are prone to hurricanes and flooding. You can cross your fingers that a natural disaster will never hit your home, but it pays to be prepared: There were a whopping 228 reported tornadoes in Texas in 2015 alone, according to the National Weather Service.

Thankfully, “Tornadoes generally fall under wind damage, which is covered by most homeowners insurance policies,” says Chandler Crouch, broker for Chandler Crouch Realtors in Fort Worth, Texas. Some damage from hurricanes, namely property destruction caused by wind, will be covered under your standard homeowners insurance plan, but the subsequent flooding isn’t covered. You’ll need a separate flood policy through The National Flood Insurance Program.

But it doesn’t end there. “A lot of wind and hail is what really makes Texas unique,” Crouch says. Depending on the area, wind and hail damage are common sources of frustration for homeowners. (You can see how likely a claim might be with the Insurance Council of Texas’ Hail Storm Events Map. Tarrant County had the highest recorded number of instances with 802 hail storms between 1955 and 2013.) While you are protected under the wind and hail portion of your policy, you should decide if you can afford to make the repairs yourself or if you plan to file a claim.

“Since most repairs don’t end up greatly exceeding the cost of higher deductibles, you start getting into a situation where it doesn’t make sense to file a claim. If you aren’t sure you can afford to pay out-of-pocket for hail damage, you need a lower deductible. Most people need around a 1 percent deductible to be able to file smaller claims, but many providers only offer 2 percent or higher,” Crouch says.

Out of our evaluated providers, Allstate, Farmers, and Liberty Mutual offer a 1 percent or lower deductible. State Farm only goes as low as 3 percent.

Is your home built on clay? Look out below!

Not all natural-related events in Texas are widely covered by homeowners insurance and you may need to plan for out-of-pocket repairs in certain areas. “Texas is notorious for our clay soil. It causes a lot of foundation issues,” Crouch says.

Unfortunately, cracked walls and sinking floors may not be covered by a standard policy. “Just normal seasonal compression and expansion of the ground that causes most of the foundation issues is not going to be covered,” Crouch says. However, if your foundation issues are bad enough to cause a major leak, that may be covered under sudden and accidental water discharge. If your home is in an area with clay soil or known foundation problems, be sure to talk to your insurance provider about coverage options so you can plan ahead of time.

Trend watch: Dispute laws may change.

Options for how a homeowner can resolve a dispute with their insurance provider are a hot topic in Texas right now. Currently, the Texas Department of Insurance is considering a mediation arbitration endorsement presented by Texas Farm Bureau Insurance, another, smaller Texas insurance provider. If approved, the mediation arbitration endorsement will give Texas Farm Bureau the ability to request customers waive their rights to sue in exchange for a lower premium amount. Instead, any disputes must be handled by a mediator.

There is some precedent to say this might become a trend. Currently, the Texas Windstorm Insurance Association, a last-resort insurer created by the state, has a similar arbitration endorsement under Texas section 2210.554. If approved, other insurance providers might follow suit, limiting your options if a dispute arises. This is definitely a story to keep an eye on as it develops.

The Bottom Line

With a state as big as Texas, where you live can make your life — and your homeowners insurance — different than your neighbors’ in other parts of the state. Whether you’re living with hail or tornadoes, or you’re on the coast for hurricane season, you need homeowners insurance tailored to what the weather might throw at you. Start by getting a handful of quotes from providers in your area.

Find the best homeowners insurance in your area.

Get a quote by entering your ZIP code and start saving today.