If you're buying a home in Sherman, Texas, or already own one here, you've probably noticed that home insurance isn't exactly cheap. And if you've been a homeowner for a while, you've definitely noticed your premiums climbing year after year. Welcome to the reality of insuring a home in North Texas—where tornado sirens, golf-ball-sized hail, and the occasional severe storm aren't just possibilities, they're practically guarantees.
Sherman sits right in the heart of what weather folks call "Tornado Alley," and it's also part of "Hail Alley"—yes, we get both distinctions. Add in Lake Texoma's proximity and the flooding concerns that come with it, and you've got a recipe for insurance companies charging a premium. But here's the thing: understanding what drives your costs and what coverage you actually need can help you make smarter decisions and potentially save money.
Why Sherman Home Insurance Costs What It Does
Let's talk numbers first. As of 2025, Texas homeowners are paying an average of $4,101 annually for a policy with $300,000 in dwelling coverage. That's up significantly from just a few years ago—premiums jumped 21% in 2023 and another 19% in 2024. Sherman residents are seeing similar increases, with local costs typically ranging from $3,500 to $5,000+ per year depending on your home's value, age, and location.
So what's driving these costs? Three main factors: severe weather frequency, rising construction costs, and insurance market dynamics. Sherman's position in Grayson County means you're dealing with tornado risk during spring and fall, large hail storms that can shred roofs in minutes, and damaging winds that seem to show up every few months. When insurers look at Sherman, they see claims—lots of them. And when claims go up, so do premiums.
Construction costs matter too. Inflation, supply chain disruptions, and labor shortages have made rebuilding homes more expensive than ever. Your insurance company isn't just covering the cost to fix your roof—they're covering today's costs to replace materials and hire contractors, which can be 30-40% higher than just a few years ago.
Understanding Your Wind and Hail Deductible
Here's where things get tricky for many Sherman homeowners: wind and hail deductibles work differently than your standard deductible. Instead of a flat dollar amount like $1,000 or $2,500, most Texas policies now use a percentage deductible for wind and hail claims. In North Texas, that's typically 2-3% of your home's dwelling coverage.
Let me break that down with an example. Say your home is insured for $300,000 in dwelling coverage (which covers the structure itself). With a 2% wind and hail deductible, you'd pay the first $6,000 of any wind or hail claim. At 3%, that jumps to $9,000. That's a lot more than most people expect to pay out of pocket when a hailstorm destroys their roof.
The important thing to understand is that this percentage is based on your total dwelling coverage, not the cost of the repairs. Even if your claim is only $10,000, you're still paying that percentage-based deductible first. This catches a lot of homeowners off guard, especially when they're dealing with the stress of storm damage.
The Lake Texoma Factor: Flood Insurance Basics
Living near Lake Texoma is one of Sherman's best features—until heavy rains come through. In May 2025, the lake rose more than seven feet above normal pool levels, causing significant flooding to businesses and properties near the water. If you're anywhere near Lake Texoma or in a flood-prone area, you need to understand that standard homeowners insurance doesn't cover flood damage. Not a drop of it.
Flood insurance is a separate policy, typically purchased through the National Flood Insurance Program (NFIP). Sherman participates in the NFIP, and you can check your flood risk by looking at FEMA flood maps, which are kept on file at Sherman's Engineering Department. Even if you're not in a high-risk flood zone, flood insurance might still make sense—about 25% of flood claims come from moderate-to-low risk areas.
The average flood insurance policy costs around $700-$1,000 per year, but that varies widely based on your specific flood risk. If you have a mortgage on a property in a high-risk flood zone, your lender will require you to carry flood insurance. Even if it's not required, consider whether you could afford to rebuild or repair flood damage out of pocket. For most people, the answer is no.
Coverage You Actually Need in Sherman
When you're shopping for home insurance in Sherman, you'll see several coverage components. Here's what matters most: Dwelling coverage is the big one—this is what pays to rebuild your home if it's destroyed. Make sure this amount reflects current construction costs, not what you paid for your home. With a population of around 46,000 and steady growth, Sherman's housing market has seen significant appreciation, but your dwelling coverage should be based on replacement cost, not market value.
Personal property coverage protects your belongings—furniture, electronics, clothing, and everything else inside your home. Most policies offer 50-70% of your dwelling coverage for personal property. If you have expensive items like jewelry, art, or collectibles, you might need additional coverage through scheduled personal property endorsements.
Liability coverage is often overlooked but incredibly important. This protects you if someone is injured on your property or if you accidentally damage someone else's property. Standard policies typically include $100,000-$300,000 in liability coverage, but many experts recommend at least $500,000, especially if you have significant assets to protect. For even more protection, consider an umbrella policy.
Additional living expenses (ALE) coverage pays for hotel bills, meals, and other costs if your home is uninhabitable after a covered loss. Given Sherman's storm risks, this coverage can be a lifesaver. Most policies provide ALE equal to 20-30% of your dwelling coverage, which should cover several months of temporary housing if needed.
How to Save Money Without Sacrificing Coverage
With Texas premiums climbing as fast as they have been, finding ways to save on home insurance has become essential. The single most effective strategy is shopping around. Different insurers assess risk differently, and you might find rate variations of $1,000 or more for the same coverage. Get quotes from at least three different companies, and don't just look at price—consider each company's reputation for handling claims.
Bundling your home and auto insurance with the same company typically saves 15-25% on both policies. If you've been with your current insurer for several years, ask about loyalty discounts. Many companies also offer discounts for things like having a monitored security system, installing storm shutters, or upgrading to impact-resistant roofing (which is especially valuable in Sherman given the hail risk).
Raising your standard deductible (not the wind/hail deductible, which is usually set separately) from $1,000 to $2,500 can lower your premium by 10-20%. Just make sure you have enough in savings to cover that higher deductible if you need to file a claim. Another option is to improve your credit score—in Texas, insurers can use credit-based insurance scores when setting rates, and a better score typically means lower premiums.
Getting Started with Home Insurance in Sherman
If you're shopping for home insurance in Sherman, start by determining how much dwelling coverage you need. A local insurance agent who understands North Texas construction costs can help with this. Don't just accept the default amount your lender requires—make sure it's enough to actually rebuild your home at today's prices.
Next, check your flood risk using FEMA's flood maps, available at Sherman's Engineering Department at 317 S Travis St or online at the FEMA Map Service Center. If you're in or near a flood zone—or anywhere close to Lake Texoma—get a flood insurance quote. It's cheaper to have it and not need it than to need it and not have it.
Finally, review your policy annually. Your needs change, home values change, and insurance companies adjust their rates constantly. What was a great deal two years ago might not be competitive today. Set a reminder to shop around every year or two—it's the best way to make sure you're getting the coverage you need at a price that makes sense for your budget.
