If you own a business in Texas, you already know that severe weather doesn't ask permission before disrupting your operations. In 2024 alone, Texas faced 16 severe storms causing $45 billion in total losses. Whether you run a retail shop in Houston, a warehouse in Dallas, or a restaurant along the Gulf Coast, your commercial property faces real risks from hail, wind, fire, and flooding. The good news? The right commercial property insurance can protect your investment and keep your business running when disaster strikes.
This guide breaks down everything you need to know about commercial property insurance in Texas—from what's covered to how much you'll pay, with special attention to the hurricane and hail coverage that matters most in the Lone Star State.
What Does Commercial Property Insurance Cover in Texas?
Commercial property insurance protects two main things: your building and your business contents. Building coverage protects the physical structure you own, including walls, roofs, and other permanent fixtures. Contents coverage protects everything inside—your office furniture, computers, inventory, equipment, tools, and supplies.
In Texas, you'll choose from three coverage levels. Basic form covers the essentials: fire, windstorms, hail, lightning, explosions, smoke, vandalism, and a handful of other named perils. Broad form expands on this, adding protection for water damage, falling objects, and damage from the weight of ice, snow, or sleet. Special form—the most comprehensive option—covers all perils except those specifically excluded in your policy. Most business owners find special form coverage worth the extra cost because it eliminates the guesswork about what's covered.
Here's what catches many Texas business owners off guard: most standard commercial property policies don't cover flood damage. If you're in a flood-prone area—and much of Texas qualifies—you'll need a separate flood policy. Similarly, if you're on the coast or in certain inland areas prone to severe weather, your standard policy might exclude wind and hail damage. That's where things get interesting.
The Hurricane and Hail Coverage Challenge
If your business is located on the Texas coast, in Harris County near Galveston Bay, or in other designated catastrophe areas, standard policies often exclude wind and hail damage—ironically, some of the most common causes of property damage in Texas. When private insurers won't cover these perils, the Texas Windstorm Insurance Association (TWIA) steps in as the insurer of last resort.
Getting TWIA coverage isn't automatic. You'll need to prove that at least one private insurer actively writing windstorm coverage in your area has denied you. Your property must have a Certificate of Compliance showing it meets windstorm building code requirements. Depending on your location, you might also need flood insurance before TWIA will sell you a policy. And your property needs to be in good repair—no unresolved damage or hazardous conditions.
One critical timing issue: TWIA won't sell you a policy if there's already a hurricane in the Gulf of Mexico. Don't wait until you see storm warnings to shop for coverage. Recently, TWIA sought a 10% premium increase for both commercial and residential properties, reflecting the growing cost of storm-related claims.
Even if you're not on the coast, pay attention to your wind and hail deductibles. These are typically percentage-based rather than flat dollar amounts. In 2024, the standard wind and hail deductible in North Texas rose to 2% of your property's total insured value, up from the longtime standard of 1%. Depending on your insurer and location, you might see deductibles ranging from 1% to 5%. Here's what that means in practice: if your building is insured for $500,000 and you have a 2% wind/hail deductible, you'll pay the first $10,000 of any wind or hail damage claim out of pocket.
What You'll Pay for Commercial Property Insurance in Texas
Commercial property insurance typically costs $1,000 to $3,000 annually for each million dollars of coverage. Smaller operations or lower-risk businesses might pay around $500 to $800 per year. Most small businesses end up paying between $720 and $2,400 annually, or $60 to $200 per month. If you bundle property coverage with general liability insurance in a Business Owner's Policy (BOP), you might pay around $1,118 annually for a low-risk operation.
Several factors drive your premium. Industry matters tremendously—construction, auto repair, and manufacturing operations face higher rates than office-based businesses. Location plays a huge role too. Urban centers like Houston and Dallas typically have higher rates due to increased property values and liability exposure. Coastal properties face the highest premiums, especially if you need separate windstorm coverage. The value of your building and contents, your chosen deductibles, and your claims history all affect your final price.
Rates have been climbing. From 2019 to 2024, multifamily property insurance costs increased more than 75% in real terms—from $39 per unit monthly to $68 per unit. In 2024, property insurance costs per unit were notably higher along the coasts of Louisiana and Texas compared to most other parts of the country. The severe weather Texas experienced in 2024 will likely push rates even higher in 2025 and beyond.
How to Get the Right Coverage for Your Business
Start by accurately assessing your property's value. Don't just guess—if you underinsure and file a major claim, you might face coinsurance penalties that leave you covering a significant portion of the loss. Get a professional appraisal if needed, especially for older buildings or specialized equipment.
Consider replacement cost coverage rather than actual cash value. Actual cash value factors in depreciation, so that five-year-old HVAC system won't be fully covered. Replacement cost coverage pays to replace damaged property with new items of similar quality, which is what you actually need to get your business operational again after a loss.
If you're in a coastal area or high-wind zone, don't assume you have wind and hail coverage—read your policy declarations page carefully. Look for exclusions and percentage deductibles. If wind and hail are excluded, start the TWIA application process early or shop for private insurers who still write windstorm coverage in your area.
Bundle when possible. A Business Owner's Policy combining commercial property and general liability often costs less than buying each separately. Plus, it simplifies your insurance management—one policy, one renewal date, one insurer to deal with when you file a claim.
Finally, review your coverage annually. Your property value changes as you expand, renovate, or acquire new equipment. Your risk profile changes too. An annual review ensures you're not overpaying for coverage you don't need or, worse, discovering you're underinsured only after disaster strikes. In a state where severe weather is a question of when, not if, having the right commercial property insurance isn't optional—it's essential to protecting everything you've built.
