Texas Leads in Disaster Risks, but Underinsurance Persists
Texas, known for its diverse landscapes, also faces a diverse range of natural disasters. It tops the charts for tornadoes, hail events, and wildfire risks, making it one of the most disaster-prone states in the nation.
Texans spend a significant portion of their income on insurance to protect against these risks. The state ranks 6th nationally for homeowners' insurance, with residents allocating an average of 3.13% of their median income to cover potential damages. Auto insurance also takes up a notable share, with Texans spending 1.65% of their median income on it, placing the state 14th in the country.
Despite these investments, underinsurance remains a pressing issue. In flood-prone areas like Kerr County and central Texas, fewer than 3% of homeowners carry flood insurance through the National Flood Insurance Program. This is alarming, given that Texas has one of the highest risk profiles for natural disasters, including severe storms, wildfires, and flooding. The state recorded over 4,000 homeowners' insurance lightning loss claims in 2024, with an average cost per claim of $38,558, second only to Florida.
To mitigate these risks and improve affordability, Texas must prioritize enhancing the resilience of its homes, businesses, and communities. This includes encouraging more residents to obtain adequate insurance coverage, especially flood insurance, and investing in infrastructure and building practices that can better withstand natural disasters.
