Sherman sits in the heart of North Texas, just an hour north of Dallas and minutes from Lake Texoma. If you're living here—or thinking about it—you've probably noticed that insurance isn't exactly simple. Between Texas's strict auto insurance laws, the lake's flooding risks, and home insurance rates that jumped 54% in five years, figuring out what coverage you actually need can feel overwhelming. Here's what you need to know about protecting yourself, your car, and your home in Sherman.
Auto Insurance in Sherman: What Texas Law Requires
Texas doesn't mess around with car insurance. You're legally required to carry liability coverage, specifically 30/60/25. That means $30,000 for injuries to one person, $60,000 total per accident if multiple people are hurt, and $25,000 for property damage. You need to show proof of insurance anytime you're pulled over or at vehicle registration.
Here's the catch: those minimums might not be enough. A serious accident can easily exceed $30,000 in medical bills for one person, and a new truck can cost way more than $25,000 to replace. If you cause an accident that goes over your coverage limits, you're personally on the hook for the difference. That's why many Sherman residents opt for higher liability limits or add umbrella coverage for extra protection.
The good news? Sherman drivers actually pay less than most of Texas. The average monthly premium here is $77 for liability-only coverage and $158 for full coverage—about 19% below the state average. Shopping around with local agents can help you find even better rates, especially if you bundle your auto and home policies.
Driving without insurance in Texas is a class C misdemeanor. First offense can cost you up to $350, but it gets worse: you'll pay a $250 surcharge every year for three years, your vehicle can be impounded, and your license and registration can be suspended. It's not worth the risk.
Home Insurance Costs and What's Driving Them Up
Let's talk about the elephant in the room: home insurance in Texas is expensive and getting worse. The average Texas homeowner now pays between $3,851 and $4,585 per year for coverage on a $300,000 home. That's roughly $321 to $382 per month. Between 2022 and 2023 alone, premiums jumped 21%.
Why? Texas weather. The state faces hurricanes, tornadoes, hailstorms, and floods—often in the same year. Claims are frequent and expensive. Add rising construction costs and labor shortages, and insurers are paying out more than ever before. That cost gets passed to homeowners through higher premiums.
In Sherman specifically, your rate depends on your home's age, construction type, location, and how much coverage you choose. Older homes typically cost more to insure because they're more likely to have outdated electrical or plumbing systems. Homes near floodplains—and Sherman has plenty near Choctaw Creek and Lake Texoma—may face higher premiums or require additional flood coverage.
Flood Insurance: Not Required, But Probably Necessary
Standard homeowners insurance doesn't cover flood damage. You need a separate flood policy, typically through the National Flood Insurance Program (NFIP). Sherman is part of the NFIP, and you can check flood maps at the city's Engineering Department on South Travis Street.
Here's why this matters in Sherman: Lake Texoma flooded in May 2025, with water levels rising more than seven feet above normal. Businesses closed, roads flooded, and the Hagerman National Wildlife Refuge saw its highest water levels since 2015. If you live near the lake, Choctaw Creek, or any low-lying area, flood insurance isn't optional—it's essential.
Your mortgage lender will require flood insurance if you're in a designated flood zone. But even if you're not, consider it anyway. Flood damage can cost tens of thousands of dollars, and without coverage, you're paying out of pocket. NFIP policies typically start around $700 per year, but rates vary based on your home's elevation and flood risk.
Finding Local Insurance Agents in Sherman
Sherman has about seven local insurance agencies serving the area, including national brands like State Farm, Allstate, Farmers, and Nationwide, plus independent agents who can compare quotes from multiple carriers. The advantage of working with a local agent? They understand Sherman's specific risks—like Lake Texoma flooding or hail damage from North Texas storms—and can tailor coverage to fit.
Independent agents are particularly valuable because they're not tied to one insurer. They shop around on your behalf, comparing rates and coverage from multiple companies. This is huge in a state like Texas where premiums vary wildly between carriers. One insurer might quote you $4,000 per year while another offers the same coverage for $3,200.
When you meet with an agent, ask about bundling discounts. Combining your auto and home insurance with the same carrier can save you 15-25% on both policies. Also ask about discounts for home security systems, storm shutters, new roofs, or claims-free history. Every little bit helps when premiums are this high.
What Makes Sherman Unique
Sherman is the county seat of Grayson County and home to about 47,000 people. It's part of the larger Sherman-Denison metro area, which has grown to over 150,000 residents. The city has a diverse economy—Texas Instruments operates a major facility here, and Lake Texoma draws tourism year-round. That economic mix means insurance needs vary widely depending on whether you're a factory worker, small business owner, or retiree living near the lake.
The median household income here is about $60,935, which means insurance costs hit hard. Spending $158 per month on car insurance and another $320 on home insurance adds up fast—nearly $6,000 per year just for basic protection. That's why shopping around and maximizing discounts matters so much in Sherman.
How to Get Started
Start by gathering your current policies and reviewing what you have. Are you carrying just Texas minimums for auto insurance, or do you have higher liability limits? Does your home policy include enough coverage to rebuild at today's construction costs? Check your deductibles—raising them from $500 to $1,000 can lower your premium, but make sure you can afford the higher out-of-pocket cost if you file a claim.
Next, get quotes from at least three different sources: one from a captive agent (like State Farm or Allstate), one from an independent agent, and one online. Compare not just the price but what's actually covered. The cheapest policy might exclude things you need, like rental car reimbursement or replacement cost coverage on your home.
Finally, check if you need flood insurance. Visit Sherman's Engineering Department or check FEMA's flood maps online to see if your property is in a flood zone. Even if it's not required, consider your proximity to Lake Texoma or any creeks. Given the 2025 flooding and Lake Texoma's history, it's better to have coverage and not need it than the other way around.
Insurance in Sherman doesn't have to be complicated. Understand what Texas requires, know your risks, and shop around. With the right coverage and a local agent who gets the Texoma area, you'll have the protection you need without paying more than you should.
