If you live in Texas, you've probably noticed your insurance bills climbing. Maybe your homeowners premium jumped by hundreds of dollars. Or your health insurance renewal notice had you doing a double-take. You're not imagining it—2026 is shaping up to be one of the most expensive years for insurance in Texas history. Here's what's happening, why it matters, and what you can do about it.
Why Your Home Insurance Bill Just Exploded
Let's start with the bad news: Texas homeowners are getting hammered. Home insurance premiums rose 21% in 2023, then another 19% in 2024. The average annual premium now sits at $4,585—that's 117% higher than the national average of $2,110. If you're paying close to $400 a month for home insurance, you're not alone.
The culprit? Mother Nature has it out for the Lone Star State. Texas is the undisputed hail capital of America. In 2024 alone, over 180,000 Texas homes took direct hits from hailstones two inches or larger—that's roughly the size of a tennis ball crashing through your roof at terminal velocity. The state recorded 878 major hail events and 169 tornadoes in a single year, both national records.
These aren't isolated incidents. Severe convective storms—those violent weather systems that bring hail, tornadoes, and straight-line winds—cost insurers $58 billion nationally in 2024, and Texas bore the brunt of it. In 2024, the National Oceanic and Atmospheric Administration counted 16 severe storms in Texas with total losses around $45 billion. May's Houston derecho alone brought 78 mph winds that left more than a million residents without power and caused billions in damage.
Insurance companies are responding the way they always do when claims spike: by raising rates and limiting coverage. Wind and hail damage now accounts for 42% of all insured home losses in Texas. Deductibles are climbing, especially for wind and hail coverage, and some insurers are pulling back on how much they'll pay out. If you're shopping for a new policy, expect to see higher deductibles and more exclusions than ever before.
The Health Insurance Crisis Nobody Saw Coming
Now for the really painful part. If you buy health insurance through the ACA marketplace, brace yourself for sticker shock in 2026. Premiums are jumping by an average of 35% across all plan levels. The benchmark silver plan that cost $489 per month in 2025 will run you $661 in 2026—and that's before subsidies.
What's behind this massive increase? Enhanced federal premium tax credits that made coverage affordable for millions of Americans expired at the end of 2025. These subsidies, which were expanded during the pandemic, kept premiums manageable even for middle-class families. Without them, the old rules are back—including the dreaded subsidy cliff. If your household income exceeds 400% of the federal poverty level, you get zero help, regardless of how expensive premiums become.
Here's where Texas really stands out—and not in a good way. Unlike 41 other states, Texas hasn't expanded Medicaid under the Affordable Care Act. That means roughly 617,000 Texans fall into a coverage gap: they earn too much to qualify for traditional Medicaid but not enough to afford marketplace plans, even with subsidies. It's a bureaucratic black hole where people who need insurance the most can't get it at any price they can afford.
The numbers are sobering. Texas already has the highest uninsured rate in America—21.6% of adults and 13.6% of children lack coverage, both roughly double the national averages. That's nearly 4 million Texans with no health insurance. The Congressional Budget Office estimates another 3.8 million people nationally will lose coverage when enhanced subsidies expire, and a significant chunk of those will be in Texas. Some experts predict up to a million Texans could drop their marketplace plans when they see their 2026 premiums.
Auto Insurance Isn't Getting Any Cheaper Either
If you thought your car insurance would give you a break, think again. The average Texas driver now pays $2,540 per year for auto coverage—that's $212 a month. Full coverage runs about $1,799 annually, which is 23% higher than the national average. Texas ranks 43rd out of 51 for auto insurance affordability, putting it firmly in the expensive category.
Why so high? It's a perfect storm of rising repair costs, more expensive medical claims, increasing litigation, and—you guessed it—severe weather damage. Those same hailstorms battering homes are also totaling cars. When your vehicle gets pummeled by tennis-ball-sized hail, that's often a complete loss. Insurers paid out massively in 2024, and they're passing those costs back to you through higher premiums.
What You Can Actually Do About It
This all sounds pretty grim, but you're not completely powerless. Here's what smart Texans are doing to manage their insurance costs in 2026.
For home insurance, shop around aggressively. Rates vary wildly between companies, and loyalty doesn't pay in this market. Ask about increasing your deductible—going from $1,000 to $2,500 can save you 15-20% annually. Consider wind and hail mitigation: installing impact-resistant roofing or storm shutters can qualify you for discounts. Some insurers offer credits of up to 30% for fortified homes. Document your home improvements and make sure your insurer knows about them.
For health insurance, don't just auto-renew. Open enrollment for 2026 marketplace plans is your chance to compare every option. Even with the premium increases, subsidies still exist for many Texans—you might qualify for more help than you think. Look at bronze and silver plans carefully; sometimes a higher deductible with a lower premium makes sense if you're generally healthy. And check if you qualify for catastrophic coverage if you're under 30 or have a hardship exemption—it's bare-bones, but it's better than nothing.
For auto insurance, bundle policies with one carrier to unlock multi-policy discounts, often 15-25%. Review your coverage limits—if you're driving an older car, full coverage might not make financial sense anymore. Increase your comprehensive and collision deductibles if you have emergency savings to cover them. Ask about usage-based insurance programs that monitor your driving; safe drivers can save up to 30%.
Most importantly, don't let high premiums tempt you to drop coverage entirely. Texas has nearly 4 million uninsured residents, and that number is climbing. Going without insurance might save money short-term, but one hailstorm, one ER visit, or one at-fault accident can financially destroy you. The peace of mind is worth the cost—you just need to find the right coverage at the best price you can manage.
