Why Home and Auto Insurance Keep Going Up — And Why It Feels Out of Control

Texans are doing everything they’re supposed to do.

They work hard.

They maintain their homes.

They drive responsibly.

They pay their taxes.

Yet year after year, their home and auto insurance premiums keep rising, often dramatically — even when they’ve never filed a claim.

This isn’t happening because Texans suddenly became higher risk.

It’s happening because the system itself is under pressure, and homeowners are stuck in the middle.

Let’s talk honestly about why.

Insurance Isn’t Based on Your Tax Bill — But It Is Tied to Rising Values

One of the biggest misunderstandings is the belief that insurance premiums are directly based on your property tax bill.

They’re not.

Insurance companies don’t look at your tax statement and raise rates because your taxes went up.

Instead, they base premiums on something called replacement cost — the amount it would cost today to rebuild your home if it were destroyed.

That replacement cost includes:

• Labor

• Materials

• Electrical, plumbing, roofing

• Permits

• Code upgrades

• Inflation

As construction costs rise, replacement costs rise.

When replacement costs rise, insurance coverage amounts increase.

And when coverage amounts increase, premiums go up — even if nothing else changes.

Why Property Appraisals and Insurance Move Together

While property taxes and insurance are not directly linked, they move togetherbecause they’re both tied to rising property values and construction costs.

When appraisal boards push property values higher, they’re often reflecting:

• Higher land values

• Higher labor costs

• Higher material costs

• Market demand

Those same factors also drive up the cost to rebuild a home.

So homeowners feel it twice:

• Once through higher property taxes

• Again through higher insurance premiums

Not because the systems are coordinated — but because costs are being passed downstream.

Why Insurers Say “We Have No Choice”

Insurance companies operate under strict rules.

They must:

• Maintain reserves

• Price risk accurately

• Cover future losses

• Purchase reinsurance

• Comply with state regulations

When:

• Storm losses increase

• Inflation raises repair costs

• Reinsurance becomes more expensive

Insurers are left with two options:

• Raise premiums

• Leave the market

That’s why Texans are seeing insurers pull out — and why fewer options often mean higher prices.

This doesn’t mean insurers are perfect.

But it does mean the problem is bigger than one industry.

The Real Issue: Homeowners Are the Shock Absorber

Right now, costs move in one direction — downhill.

• Appraisals go up

• Government spending grows

• Inflation raises rebuild costs

• Insurance premiums rise

And the homeowner absorbs it all.

Families who did nothing wrong are being priced out of stability, certainty, and predictability.

That’s not sustainable.

What Needs to Change

This isn’t about blaming insurers or demonizing government.

It’s about accountability, transparency, and discipline.

We need:

• Clear justification for large rate increases

• Strong action against fraud and abuse

• Incentives for mitigation and responsibility

• Fiscal restraint that reduces inflationary pressure

• Policies that stop treating homeowners as an endless revenue source

When systems lack discipline, people lose trust.

A Closing Thought

Insurance is supposed to be about managing risk, not punishing responsibility.

When families do everything right and still fall behind, the system isn’t working — and it’s time to fix the system, not blame the people living under it.

That’s the conversation Texas needs to have.