2026 Texas Insurance Update: What Agents and Policyholders Need to Know

2026 has been a year of major change for the Texas insurance market. From new transparency laws to soaring homeowners rates and regulatory shifts, the landscape is evolving fast. Here’s what every insurance agent and policyholder needs to know.

Homeowners Rates Continue to Climb

Texas homeowners are paying significantly more for insurance than they were just a few years ago. The average annual homeowners insurance premium in Texas has risen 79% since 2020 — from under $2,000 to over $3,500 in 2026. By the end of 2026, projections show the average annual premium could reach $4,529, ranking Texas among the top five most expensive states in the country.

What’s driving the increases?

• Severe weather events and rising construction costs
  
• Higher reinsurance rates passed on to policyholders
  
• Increased claims litigation

FAIR Plan changes: TDI approved new FAIR Plan rates effective September 1, 2026. Homeowners rates are decreasing 2.6%, condominium rates 7.5%, and tenants rates 25% statewide. However, dwelling fire rates are increasing 3.5% and dwelling extended coverage is rising 21.6%.

Auto Insurance: Rates Creeping Up

Auto insurance costs are also trending upward. TDI has approved TAIPA rate increases effective November 1, 2026 — an overall 2.8% increase for private passenger auto and a 4.9% increase for commercial auto.

Average costs in 2026:

• Minimum coverage: ~$1,680 annually ($140/month)
  
• Full coverage: ~$2,893 annually ($241/month)

$1 fee funds Flock cameras: A $1 fee added to Texas auto insurance policies — originally passed in 2023 to combat catalytic converter theft — has funded thousands of Flock safety cameras across the state.

New Laws Taking Effect in 2026

HB 2067: Insurers Must Explain Policy Decisions

Effective January 1, 2026, insurance companies must provide a written explanation when they decline, cancel, or don’t renew an auto or homeowners policy. This applies to all property and casualty insurers, including farm mutual companies. Insurers must also report their reasons to TDI quarterly.

SB 458: Mandatory Appraisal Clauses

Texas law now requires personal auto and residential property policies to include a binding appraisal clause to resolve disputes over loss amounts. TDI has proposed rules expected to take effect for policies issued or renewed on or after September 1, 2026.

TDI Issues AI Guidance

On June 12, 2026, TDI issued Commissioner's Bulletin B-0003-26 clarifying how insurers can use artificial intelligence. The message is clear: AI is not a loophole. Insurers must ensure AI decisions comply with all insurance laws and avoid unfair discrimination. TDI will monitor AI use through examinations and consumer complaints.

Health Insurance: ACA Premiums Rising

Health insurance costs are increasing as well. Carriers have requested an average premium increase of 24% for Affordable Care Act plans in Texas in 2026. Despite this, Texas ACA enrollment continues to grow — the state added more than 200,000 plan selections in 2026, setting another record.

Governor Abbott Directs TDI to Lower Property Insurance Costs

On August 24, 2026, Governor Greg Abbott issued a formal directive to Texas Insurance Commissioner Amanda Crawford, instructing TDI to take immediate administrative action to address rising property and casualty insurance costs. Recommendations are due to the Governor’s office by September 14, 2026.

What This Means for Agent

2026 is a year of significant change for Texas insurance agents. New transparency laws, shifting rates, AI regulations, and legislative directives all require agents to stay current. Clients will have questions about rate increases, policy denials, and new appraisal rules.

Staying informed is essential — not just for compliance, but for serving clients effectively and building trust.

Time2Renew offers TDI-approved continuing education courses covering ethics, legal updates, and emerging risks — all online and self-paced.

👉 Stay current with Time2Renew CE

About Time2Renew: Texas insurance agents trust us for practical, up-to-date continuing education. TDI-approved. Ethics, general, and specialty courses available. Start today.