DFW - homeowner insurance is expensive

11 Replies

I am under contract on a deal in Allen, TX and processing the loan. Its a rental property. Lender asked me to get a quote for home owner insurance. I reached out to few insurance company. Quotes came about $1400-$1800 per year and it comes about $110-150/month. we have few properties in CA and IL. we are usually paying about $700/year. Why its so expensive in Texas? Please share your experience or recommendation if any. 

What is the sales price of the property? I typically see about 0.60 - 0.65% of sales price as an average premium (depending on coverages, deductibles, and age/style of property). Of course there are a lot of factors. 

One reason TX insurance is so high is because of wind/hail and roof replacements. Lots of hail storms every fall and spring in the DFW area means more expensive insurance. 

@Pradeepa Indirajith. I presume you are speaking of Allen, TX in the greater DFW area. 

I would guess a main driver might be potential for Tornado activity!

@Pradeepa Indirajith based on that sales price I’d say you could get to $1100-1300 annual premium with sufficient coverages. I’ll PM you a couple good insurance contacts I have 

Yes, we were shocked at the rates when we moved from CA to TX in 2002.  Then one of the first things we did was have our insurance company replace our roof because of hail damage.  In other words, it not "insurance" in the purest sense of the word... part of it is almost like a fund to put money into for WHEN (not IF) you need a new roof or other major storm repair.... at least that has been my experience so far...

I am experiencing the same issue here in DFW. Insurance companies are raising premiums due to the hail storms we experienced within the past 2 years. I was even told that some insurance companies have stopped writing policies in Denton county.

I would just continue to shop around as many companies as you can and adjust your deductibles for lower pricing.

@Pradeepa Indirajith Having used to live in dfw I try to Warn other out of state investors of these things. Property taxes are high, insurance is high. Kills a lot of cash flow. I don’t think you can reallt cash flow in DFW right now. I lived there and I went out of state lol. Also don’t forget about flash flooding. Also increases insurance but like others said it’s mostly due to hail and wind damaging roofs

Be sure to add a rider for foundation coverage if it's a slab. Most of north Texas is clay which moves quite a bit. Older homes used to be pier and beam but now everything is slab on grade because it is cheaper. Slab leaks are very common and can be very expensive. If it is copper pipe make sure the ground connection (usually attached near the water heater) is nice and tight. 

Agree with other posters about why it is high. Car insurance is high as well due to storms and the higher number of uninsured motorists. My car insurance for my wife and I with good driving records is more than some SFR homeowners policies. On the other hand, I had a hailstorm that came through in 2011 and I got a new roof, siding, and carport-I had only owned the property for one month.

Originally posted by @Pradeepa Indirajith:

I am under contract on a deal in Allen, TX and processing the loan. Its a rental property. Lender asked me to get a quote for home owner insurance. I reached out to few insurance company. Quotes came about $1400-$1800 per year and it comes about $110-150/month. we have few properties in CA and IL. we are usually paying about $700/year. Why its so expensive in Texas? Please share your experience or recommendation if any. 

 That sounds like about what I would expect for insurance.

Mold, hail, hurricanes all expensive.