Texas Home Premiums Are Up 79% Since 2020. The Insurance Department Has Until September 14 to Say What It Will Do.

Governor Greg Abbott issued a directive to the Texas Department of Insurance on August 24, 2026. The figure attached to it is a 79% increase in the average annual homeowners premium since 2020 - from under $2,000 to more than $3,500. One account of the directive puts the 2025 statewide average at $3,506.

TDI has until September 14, 2026 to come back with recommendations, covering both steps it can take administratively now and statutory changes it would want in the 2027 legislative session.

The four asks

• Rating credit for resilience: require insurers to factor FORTIFIED roof designation into how a premium is calculated.
• Age-based underwriting: prohibit declining or non-renewing a policy on the basis of the age of the home or of a component, roofs in particular.
• Price optimization: issue a bulletin banning the practice, described in the directive as the use of personal information unrelated to insured risk to determine prices.
• Claims costs: establish an insurance fraud task force and study the effect of excessive, unnecessary and inflated claims costs.

High insurance costs hit Texas families hard. Today I direct the Texas Department of Insurance to put consumers first and take action that makes property and casualty insurance more affordable.

What a directive can and cannot do

This is the part worth being precise about. A directive from the Governor's office does not change the Insurance Code and does not set a rate. It leans on authority TDI already has - Section 31.002 of the Texas Insurance Code, on promoting a stable market, and the provisions in Chapter 544 and Section 2251 that address rates which are excessive or unfairly discriminatory.

Texas is a file-and-use state. An insurer files a rate and may use it, with the regulator able to challenge it afterwards rather than approve it in advance. That structure limits how quickly any of this reaches a renewal notice.

The price optimization question

Of the four items, the price optimization bulletin has the widest reach, because it goes to the line between rating on risk and rating on the customer. The distinction the directive draws - personal information unrelated to insured risk - is the same distinction the Federal Trade Commission drew on August 19 in its proposed enforcement policy statement on personalised pricing, which expressly noted that individualised pricing is long established in insurance.

Where the two diverge is the remedy. The FTC's proposal would require disclosure. The Texas directive asks for a prohibition.

The counter-argument

At least one Texas policy analysis of the directive raised the obvious objection: separating insurance prices from underlying risk can shift costs among policyholders rather than remove them, and it questioned whether greater regulation or greater competition is the better route to affordability. Neither the directive nor TDI has published an estimate of the cost effects.